Fertiliser subsidy doubled to Rs 95,013 cr in FY09

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New Delhi, May 27 (UNI) For reasons better known, the UPA government will not hike the MRP of fertilisers for the farmers even as global prices of imported raw material for the industry as well as that of imported products have trebled, leading to doubling of the fertiliser subsidy bill at Rs 95,013 crore in 2008-09 from Rs 40,338 crore during last year.

On other hand, Fertilisers and Chemicals Minister Ram Vilas Paswan today claimed that their government had to foot total subsidy of more Rs one lakh crore during past four years to supply cheaper fertilisers to the farmers in the country.

When NDA was replaced by the UPA government, the fertiliser subsidy was mere Rs Rs 15,779 crore during 2004-05.

The import of urea this year is expected at 6.5 million tonne as against 6.9 million tonne last year, while DAP at 3.5 million tonne as compared to 2.9 million tonne in 2007-08, the Minister told reporters at a press conference here.

The current MRP of urea for farmers is Rs 4,830 per tonne, DAP Rs 9,350 a tonne and MOP at Rs 4,455 per tonne. But the estimated cost of production, accounted for to pay off the different between it and MRP, is for urea is Rs 18,910 a tonne, DAP Rs 51,123 a tonne, MOP at Rs 23,788 per tonne and Complex Fertilisers at Rs 35,943 a tonne.

The highest subsidy per tonne is given on DAP at round Rs 42,000.

International prices of fertilisers have also gone up for DAP from 330 dollars per tonne in 2006-07 to 658 dollars a tonne this year and that urea from 256 dollars a tonne to 341 dollars a tonne.

As no investment has come in the Indian fertiliser industry for past one decade, the Minister announced that the government will come up with a new investment-friendly policy for the industry within two-three weeks to encourage the domestic production.

In order to attract investment in the fertiliser sector, he said units envisaged under the new policy would get price parity with international rates.

He added that the new fertiliser pricing policy will be benchmarked with international prices. However, the price may be five per cent less than international price when the costs of domestic fertilisers are calculated.

The annual policy for phosphorus and potash (P&K) may be sent to the Cabinet within the next three weeks. ''We are expecting comments from the Finance Ministry in next couple of days. After that it will be placed before the Cabinet.'' The Minister also announced that fertiliser monitoring system with regard to stock, sales and their availability would be extended to block level in another two months.

The government will also encourage joint venture for India fertiliser companies abroad and one more unit is likely to be added to existing joint venture urea unit there.

Besides, eight closed units of fertilisers formally closed in 2002, will be revived this year only and all them will be gas-based following a nod from the Petroleum Ministry for supplying the requisite gas for them, the Minister added.

Presently, the fertiliser industry is getting 29 MMSCMD gas against the requirement of 41 MMSCMD gas. And with the revival of the closed units, the requirement of gas will touch 95 MMSCMD.

Mr Paswan said the distribution of fertilisers would be ensured to the farmers with official monitoring extending to block level from the district level so far.


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