Financial Daily from THE HINDU group of publications
Friday, Jun 10, 2005
Financial Daily from THE HINDU group of publications Friday, Jun 10, 2005 |
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Opinion
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Letters Fertiliser subsidy
"India is a functioning anarchy!" said Prof John Kenneth Galbraith, the renowned economist and a former US ambassador to India. We bend backwards to prove him right time and again. Our fertiliser policy is hurting us like never before. The government fixed the DAP price at Rs 9,350 per tonne when the international price of phosphoric acid was $402 per tonne. The subsidy component was to take care of losses. Now phosphoric acid prices have shot up to $480 per tonne, which hits DAP manufacturers, who suffer a loss of around Rs 2,500 per tonne. The immediate solution is to increase subsidy.It will take 8 weeks to ship phosphoric acid from North Africa to DAP manufacturing units. As the decision is pending, DAP fertiliser manufacturers have stopped production , and with the onset of monsoon in South India, the demand has peaked, just as supplies have dried up! This situation could have been avoided if, instead of the subsidy culture, chemical fertilisers, including DAP, had been decontrolled, and market forces were free to drive out the inefficient products. N. Narasimhan Bangalore
Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in
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