The Hindu Business Line : GoM okays uniform freight rates for de-controlled fertilisers

What’s on and not
GoM rejects proposal to provide subsidy directly to farmers.
It also gave in-principle nod for setting up a regulator.
Sulphur, fortified fertilisers also to be included in the subsidy regime.

New Delhi, Feb. 13 The Group of Ministers (GoM) on Fertilisers has given its nod for extending the uniform freight rates for de-controlled fertilisers.

“The GoM after its meeting on Tuesday has decided to extend the uniform freight rates for the de-controlled fertilisers similar to what it is for urea,” an official from Department of Fertilisers told Business Line.

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

To form SPV

The official also said that the GoM has agreed for a special purpose vehicle to be created by three fertiliser public sector undertakings — Rashtriya Chemicals & Fertilisers Ltd, Krishak Bharati Cooperative Ltd and National Fertilizers Ltd – for joint ventures abroad. They, however, rejected a proposal to provide subsidy directly to farmers.

“The GoM also approved the move to include sulphur and fortified fertilisers in the subsidy regime, which may result in an additional subsidy burden of around Rs 1,200 crore.

“The process of fortification, which improves soil productivity, involves enriching a regular fertiliser product with secondary or minor soil nutrients like zinc or boron. This can be done either through mixing the minor nutrients with the main fertiliser or by coating the main product with a layer of the minor nutrient,” the official said.

Sulphur is considered to be the fourth most important soil nutrient after nitrogen, phosphorous and potash and its deficiency is seen as a big reason for the reduced effectiveness of the primary nutrients.

Regulator

The GoM has also given an in-principle nod for setting up a regulator.

“We are currently working out the framework and the powers that the regulator will have. The whole process is likely to be completed by the end of this month and the Department is likely to approach the Cabinet in February,” the official said.

He added that the idea of the department is to complete all the formalities and have the regulator in place before the end of the current financial year.

“Since there was no consensus on the manner in which the nutrients would be priced under the nutrient-based subsidy regime and also as the decisions are political in nature and they have been left for the Cabinet to decide,” the official added.

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