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Fertilisers
Fertiliser subsidy to exceed Budget estimates
Total subsidy may cross Rs 24,000 crore
Our Bureau
Rising burden
Selling price of fertilisers remained constant since February 28, 2002 though input costs have increased rapidly.
Dept of fertilisers is formulating a revised policy for di-ammonium phosphate (DAP).
Wor king Group under the Chairmanship of Mr Y.K. Alagh formed for reviewing new pricing scheme.
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New Delhi
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Feb. 27
The fertiliser subsidy for fiscal 2005-06 is likely to exceed the Budget estimate of Rs 16,254 crore due to steep increase in feedstock and raw material costs, the Economic Survey placed in Parliament today stated.
Officials in the Department of Fertilisers (DoF) told Business Line that as per revised estimates, the total subsidy would exceed Rs 24,000 crore.
During 2005-06, subsidy on urea has been estimated at Rs 11,053.9 crore while on decontrolled phosphatic and potassic fertilisers has been pegged at Rs 5,200 crore.
One of the main reasons for increase in the subsidy amount is that the selling price of fertilisers remained constant since February 28, 2002 though there had been severe increases in input costs, the survey noted.
The consumption of chemical fertilisers (in terms of nutrients) rose by 9.5 per cent to 18.4 million tonnes during 2004-05 as compared with previous year, while urea consumption was higher by 4.5 per cent on year-on-year basis.
The estimated consumption of fertilisers for the first half of the current fiscal stood at 10.1 million tonnes.
Domestic production of nitrogenous and phosphatic fertiliser has been estimated at 156.03 lakh tonnes in 2005-06 as against 154.05 million tonnes in 2004-05.
In terms of consumption of fertilisers per hectare, the all India average increased to 96.6 kg in 2004-05 against 88.2 kg in the year-ago period.
Consumption of fertilisers varied significantly among States. While in the plains, per hectare consumption was high in Punjab, Haryana, Uttar Pradesh and Andhra Pradesh, it was low in Rajasthan, Orissa and Madhya Pradesh and the north-eastern States.
The production of single super phosphate (SSP) has become unviable due to increase in the price of inputs and no change in MRP and subsidy, leading to capacity utilisation in the industry falling to 37 per cent, the survey said.
With effect from September 1, 2005, the Government has increased the ad hoc concession rate in respect of all types of SSP to Rs 975 per tonne from Rs 650 per tonne, thereby bringing some relief to poor farmers.
The survey also pointed out that the DoF was in the process of formulating a revised policy for di-ammonium phosphate (DAP) keeping in view the recommendation of the expert group, which suggested domestic DAP to be benchmarked with international DAP prices in a transparent manner.
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