The Hindu Business Line : Fertiliser subsidy: Scope to be expanded

New Delhi, Oct. 16 The Department of Fertilisers (DoF) and the Union Agriculture Ministry are looking at expanding the scope of subsidy to all fertilisers which are present in the Fertiliser Control Order (FCO).

“At the moment, the subsidy exists for only 11 complexes and three fertilisers. But both the DoF and the Agriculture Ministry want the subsidy regime to be extended to the 200 fertilisers and complexes which are a part of the FCO. This is being done to shift to the nutrient-based subsidy regime which is under the consideration of the Group of Ministers (GoM),” an official in the Department of Fertilisers told Business Line.

GoM meet

The GoM was supposed to have met on Wednesday, but it has now been postponed and is likely to meet next week.

The GoM is headed by the Agriculture Minister, Mr Sharad Pawar, and the other members include the Finance Minister, Mr P. Chidambaram, the Minister for Chemicals, Fertilisers and Steel, Mr Ram Vilas Paswan, and the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia.

Currently, the subsidised fertilisers contain only the primary soil nutrients – nitrogen (N), phosphorus (P) and potassium (K). Experts say that the current subsidy regime has not only led to an overuse of the primary nutrients but has resulted in the secondary and micronutrients being neglected.

“The move will also help farmers to have the flexibility to choose the fertiliser as per the need of the crop. It will also enable them to change the fertiliser depending on the soil pattern,” the official said.

Meanwhile, the DoF will be asking the Finance Ministry for Rs 11,400 crore in the second supplement. The increase in the cost of gas and urea has pushed up the fertiliser subsidy for the current financial year to Rs 48,000 crore, of which the Government has allocated Rs 22,450 crore in the Budget and the DoF has got Rs 15,000 crore in the first supplement.

“We have sent the proposal to the Finance Ministry and we are awaiting their response,” Mr Paswan said here on Tuesday.

The Minister also said that they expect the Rs 7,500-crore bonds that were part of the first supplement to be released in the next couple of days.

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