Inter-ministerial panel may not recommend hike in P&K fertiliser subsidy

NEW DELHI: The inter-ministerial committee on NBS is not expected to recommend any hike in phosphatic and potassium (P&K) fertiliser subsidy for 2014-15 because of stable rates of nutrients in global markets, sources said.

The panel, set up for the implementation of nutrient-based subsidy (NBS) policy for P&K fertilisers, met recently to decide on the issue and the majority view was to maintain it at the current level, they said.

It is likely to recommend no change in P&K subsidy, sources said, adding that the Fertiliser Ministry would prepare a Cabinet note based on the panel's suggestion.

The panel comprises of senior officials of Agriculture Ministry, Finance Ministry alongwith Fertiliser Ministry.

Sources said the Finance Ministry is against any increase in the subsidy, while the agriculture as well as the fertiliser ministries are in its favour, so that retail prices remain lower.

The government had reduced the subsidy rates on P&K fertiliser last year in view of the fall in global prices.

In April 2010, the government had decontrolled the P&K (non-urea) fertilisers by giving freedom to the manufacturers to fix MRP (maximum retail price). But, it offers a fixed subsidy on P&K nutrients to keep domestic rates lower.

However, in urea, the MRP is fixed at Rs 5,360 per tonne and subsidy keeps changing depending upon the production cost of domestic urea and landed cost of imported urea.

Till November in the current fiscal, the total supply of P&K fertiliser, domestic production as well as imported, was 120.52 tonne, while the budgeted estimate for the subsidy in the current year was Rs 29,426.88 crore.