Minister Ananth Kumar promises to resolve fertiliser subsidy arrears of Rs 40,000 crore

NEW DELHI: Union fertiliser minister Ananth Kumar on Wednesday said his ministry is working with the finance ministry to clear the subsidy arrears of Rs 40,000 crore to fertiliser companies.

“In recent months we have been persuading the finance minister, who has been generous to the sector,” Kumar said while addressing Fertiliser Association of India’s annual conference in the capital. “We assure you that a solution to the subsidy arrears will be taken,” he said.

The minister said urea production in the country is expected to rise this year after a gap of 15 years, growing 7% to a 24 million tonnes, which will help reduce India’s import dependence.

Kumar said the country’s fertiliser industry a success story, growing at a rate of 18.6% a year.

Fertiliser Association officials said subsidy arrears could reach Rs 45,000 crore by the end of this fiscal if no additional fund is provided. About Rs 72,000 crore was allotted in the budget but the funds have almost exhausted, they said.

Speaking at the event, Kumar also said urea production in the country is expected to rise this year after staying stagnant in the last few years, growing 7% to a 24 million tonnes, which will help reduce India’s import dependence. The country has been meeting a gap of 8 million tonnes of urea through imports from Oman, Iran and China.

Urea is a controlled fertiliser and is sold at a fixed selling price of Rs 5,360 per tonne. The difference between cost of production and selling price is paid as subsidy to manufacturers.