FM maintains subsidy on fertilizers

NEW DELHI: In a major relief to farmers, government on Monday said it would continue with the fertiliser subsidy regime and a restructuring of the mechanism was in the offing.

"We shall continue to provide subsidy on food, fertiliser and petroleum," Finance Minister P Chidambaram told Parliament while presenting the budget for 2005-06.

The estimated burden on fertiliser subsidy stands at Rs 16,254 crore, he said.

He said procurement of foodgrains would be decentralised, especially in the non-traditional states.

However, the proposed decentralised procurement system would not affect the Minimum Support Price (MSP) mechanism currently in operation, Chidambaram added.

Favouring conversion of naphtha and LSHS and furnace oil based fertiliser plants to gas-based units, he said this would make the plants more viable and economical to not to increase subsidy burden on the exchequer.