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Ambarish Mukherjee

SSP manufacturers had complained that because of vote politics, no State Government was willing to increase the SSP selling price.

New Delhi , Jan. 26

THE Union Government is working on a proposal to substantially hike the subsidy payable to single super phosphate (SSP) manufacturers.

According to Ministry officials, the current subsidy of Rs 650 per tonne may be doubled at one go and would be linked to the cost of rock phosphate.

About three months ago, SSP manufacturers had urged the Government to immediately announce a revised subsidy policy for SSP taking into consideration the increased cost of manufacturing consequent to the increase in the prices of raw materials.

SSP is the only fertiliser for which the selling price is fixed by the State Governments, while the concessions or subsidies are determined by the Union Government. SSP manufacturers had complained that because of vote politics, no State Government was willing to increase the SSP selling price and the subsidy had remained fixed since 2002, while cost of manufacturing had increased substantially.

According to the proposal being considered by the Ministry of Chemicals and Fertilisers, SSP could possibly be treated at par with the di-ammonium phosphate (DAP), since both the fertilisers supply the same phosphate to the plants and they can be treated equally in terms of nutrients.

As of now, the total subsidy paid by the Centre to the SSP industry is close to Rs 200 crore. If the subsidy is doubled, that would put an additional burden of around the same amount on the Central exchequer.

The officials admitted that the cost of production has actually increased because the prices of the two main raw materials — sulphuric acid and rock phosphate — have gone up significantly in the international market. During the past three years, the cost of imported rock phosphate has increased from around $45 per tonne to around $60 per tonne, while that of sulphuric acid has gone up from around Rs 1,200 per tonne to around Rs 2,200 per tonne.

Currently, the capacity utilisation in the SSP industry is less than 40 per cent and some units have actually closed down. Simultaneously, there is a scarcity in the market that is forcing the Government to initiate some action. However, after the Department of Fertilisers finalises the proposal, it will be sent to the Planning Commission and the final clearance will have to come from the Ministry of Finance, the officials said.

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