Government keeps subsidy rates for DAP and MOP unchanged

NEW DELHI: The Centre today fixed the subsidy rates for complex fertilisers -- Diammonium Phosphate and Muriate of Potash -- for current fiscal at the same rate as that of last year's level of Rs 12,350 and Rs 9,300 per tonne, respectively.

In April 2010, government had decontrolled the phosphatic and potassic (P&K) (non-urea) fertilisers by giving freedom to the manufacturers to fix MRP (maximum retail price).

The Centre offers a fixed nutrient based subsidy (NBS) on P&K nutrients to keep domestic rates lower.

The government decided to continue the existing subsidy rates for 22 grades of P&K fertilisers under the NBS policy for the current year, Fertiliser Ministry said.

"Subsidy rate for Diammonium Phosphate (DAP) remains same at Rs 12,350 per tonne while it is Rs 9,300 for Muriate of Potash (MOP)," it added.

Separate subsidy for boron and zinc coated fertilisers have also been continued, the Ministry said.

It added that the movement plan for P&K fertilisers has been freed to reduce monopoly of few companies in a particular area so that any company can sell any P&K fertiliser across the country.

The Ministry also said that the government will have legal tools to direct fertiliser suppliers to supply them in any part of the country, specially where it is short in supply.

The subsidy on rail freight has now been decided to be given on a lumpsum basis so that the companies economise on transport which will help farmers reduce pressure on railway network.

There are 19 units producing phosphatic fertilisers. The entire requirement of about 30 lakh tonnes of MOP is met from imports since there is no resource of potash in the country.

The final settlement of subsidy claims will continue to be done only after the acknowledgment of receipt of fertilisers by retailers.