Pending sops for fertiliser to be cleared only in Feb
The funds-crunched fertiliser sector is likely to get whopping pending subsidies totalling Rs 12,500 crore cleared by the finance ministry only at the Revised Budget stage in February 2008.
By Prabha Jagannathan, TNN |
NEW DELHI: The funds-crunched fertiliser sector is likely to get whopping pending subsidies totalling Rs 12,500 crore cleared by the finance ministry only at the Revised Budget stage in February 2008.
The flat refusal of the finance ministry to clear the entire pending dues in the second supplementaries comes at a time when international prices of key intermediates and inputs are skyrocketing internationally. To boot, local prices and availability of fertilisers have also been affected. This could potentially be serious, given that deliberately thwarting the indigenous fertiliser sector will necessitate imports to meet demand and ensure 4% growth in the crucial farm sector.
“If we don’t get our dues cleared on time, we may have to import rock phosphate and sulphur at unprecedented global prices, thanks to tight market availability and high input prices,” industry sources stressed.
In 2006-07, for instance, the price of urea was $235 per tonne. But it has shot to $405 per tonne. DAP, priced at $300 per tonne in 2006-07, has now gone up to $600 per tonne. Rock phosphate, sulphur and phosphoric acid prices have also shot up. The developments have put the fertiliser industry in a quandary. This, when there is just one month of wheat sowing season left to go this Rabi. Wheat acreage has fallen this Rabi despite high MSP. Much of that, it is understood, is due to grave shortage of fertilisers, particularly DAP and NPK.
“There is a shortage of these, although urea supply may not face as severe a problem except in a few pockets,” ministry sources acknowledged.
Curiously, the government budgeted for a lower Rs 22,451 crore of fertiliser subsidy, despite a whopping carryover subsidy bill of over Rs 11,500 crore from the previous year.
The flat refusal of the finance ministry to clear the entire pending dues in the second supplementaries comes at a time when international prices of key intermediates and inputs are skyrocketing internationally. To boot, local prices and availability of fertilisers have also been affected. This could potentially be serious, given that deliberately thwarting the indigenous fertiliser sector will necessitate imports to meet demand and ensure 4% growth in the crucial farm sector.
“If we don’t get our dues cleared on time, we may have to import rock phosphate and sulphur at unprecedented global prices, thanks to tight market availability and high input prices,” industry sources stressed.
In 2006-07, for instance, the price of urea was $235 per tonne. But it has shot to $405 per tonne. DAP, priced at $300 per tonne in 2006-07, has now gone up to $600 per tonne. Rock phosphate, sulphur and phosphoric acid prices have also shot up. The developments have put the fertiliser industry in a quandary. This, when there is just one month of wheat sowing season left to go this Rabi. Wheat acreage has fallen this Rabi despite high MSP. Much of that, it is understood, is due to grave shortage of fertilisers, particularly DAP and NPK.
“There is a shortage of these, although urea supply may not face as severe a problem except in a few pockets,” ministry sources acknowledged.
Curiously, the government budgeted for a lower Rs 22,451 crore of fertiliser subsidy, despite a whopping carryover subsidy bill of over Rs 11,500 crore from the previous year.
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