Govt fixes Rs 28,500 cr subsidy for decontrolled fertilisers

NEW DELHI: The Centre on Friday said it will provide this fiscal about Rs 28,500 crore as subsidy to decontrolled fertilisers under the nutrient-based subsidy policy that came into effect from April 1.

Under the new nutrient-based subsidy policy (NBS), the government provides subsidy on decontrolled (whose MRP is not decided by the government) nutrients such as Phosphorus (K) and Potash (S).

About Rs 28,500 crore has been allocated for decontrolled fertilisers under the NBS, Minister of State for Chemicals and Fertilisers Srikant Kumar Jena said in a written reply to the Rajya Sabha.

A budget estimate of Rs 52,840.73 crore has been set for fertiliser subsidy during the 2010-11 fiscal, he said.

Of the Rs 28,500 crore allocation, the government will provide Rs 13,000 crore to indigenous decontrolled fertilisers and Rs 15,500 crore to ones that are imported, he added.

The minister further said, "The amount of subsidy to be released under the NBS depends upon the requirement of the decontrolled phosphorus and potash fertilisers in the country."

He, however, added, "The total quantity of fertilisers to be consumed during 2010-11 under the NBS and the savings of subsidy thereof cannot be predicted at present."

The Budget allocation for fertiliser subsidy was at Rs 49,980 crore for 2009-10.

The country has a capacity to produce 125 lakh tonnes of phosphatic fertilisers, of which Diammonium Phosphate (DAP) constitutes about 50 lakh tonnes and other complexes varieties make up the rest.

India imports 50-60 lakh tonnes of urea, 40 lakh tonnes of Muriate of Potash (MOP) and 60 lakh tonnes of DAP every year.