Fertiliser subsidy more than double the budgetary allocation

New Delhi, May 23 (UNI) The total fertiliser subsidy burden in the current financial year is more than double the budgetary allocation of Rs 24,500 crore as announced in the General Budget for 2007-08.

Highlighting the achievements of his Ministry during 2004-07, Chemicals and Fertilisers Minister Ram Vilas Paswan informed here today that the total subsidy burden for the fertiliser industry during the current financial year is estimated at Rs 50,284 crore, inclusive of Rs 8,083 crore backlog of the previous year.

Of the Rs 8,083 crore, payment of Rs 4,000 crore has already been made and the balance will be paid by June to clear last year's subsidy payment, he said.

For the current year's subsidy bill of Rs 42,201 crore, the Minister said the Committee of Secretaries (CoS) is considering the rationalisation of subsidy bill and the three concerned ministers -- Agriculture, Chemicals and Fertilisers and Finance -- are also in touch with each other to find a way out to meet the payment of this huge subsidy bill without any burden on the farmers.

Mr Paswan made it clear that farmers' interests will be taken care of while considering the rationalisation of subsidy otherwise the cost of production will go up and reduce the farmers profit.

He mentioned that several significant steps were taken during the last three years of the UPA Government in the fertiliser sector and concerted efforts were made to increase domestic production of fertilisers and improve timely availability of major fertilisers in adequate quantity.

The demand for urea went up from 214.07 lakh tonnes in 2004-05 to 249.46 lakh tonnes in 2006-07 while DAP demand increased from 70.59 lakh tonnes to 81.29 lakh tonnes and MOP from 23.02 lakh tonnes to 33.23 lakh tonnes during the period.

Production of urea increased to a record level of 203.09 lakh tonnes in 2006-07 from 196.24 lakh tonnes in 2000-01. However, production of DAP remained stagnant at 48.57 lakh tonnes after reaching a peak at 52.36 lakh tonnes in 2003-04 due mainly because of feed stock problems. Shortfall was met by importing larger quantity so as to meet the demand in time and in sufficient quantity.

He said to modernise and restructure sick public sector companies and revive sick industry, the Government has decided in principle to examine the possibility of revival of HFCL and FCIL subject to confirm availability of gas, expected by 2009.

The financial restructuring package for the Fertilisers and Chemicals Travancore LTD (FACT) has helped the company in reducing its losses and increasing its operations while the revamp project of Namrup units of BVFCL was completed and Namrup-II was commissioned on November 22, 2005.

MORE UNI