The Budget for 2011-12 grossly underestimates the fertiliser subsidy required for 2011-12, says Mr A Vellayan, Executive Chairman, Murugappa Group . The Group is one of the largest producers of fertilisers in the country. “Even without much growth in consumption, at the current world prices, it is estimated that the overall fertiliser subsidy allocation needs to be around Rs 80,000 crore, which is Rs 30,000 crore more than what has been earmarked,” Mr Vellayan has said in a statement. However, he has noted that the Budget has a lot of positives. For instance, raising farm credit by Rs 1,00,000 crore from Rs 3,75,000 crore in the current year and incentivising timely repayment of short term farm loans by enhanced interest subvention to three per cent will lead to increasing the cash in the hands of the farmers, Mr Vellayan said. By allocating Rs 10,000 crore for Nabard's short-term rural credit fund for 2011-12 and strengthening its capital base by Rs 3,000 crore in a phased manner, the Budget has gone a long way in strengthening the institution's rural infrastructure initiatives, he said.

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