New fertiliser policy to cap subsidy; norms likely in 2 months

NEW DELHI: The Fertiliser Ministry may come up with guidelines for the new subsidy policy in the next two months, whereby the dole out amount is likely to be fixed by the government in advance, throwing fertiliser prices open to change in sync with market realities.

"We are working out the modalities (for shifting towards nutrient-based subsidy from product-based pricing regime). We will have to discuss it with the industry as well as other stakeholders. We will try to do it in the next 1-2 months," Fertiliser Secretary Atul Chaturvedi told PTI.

Though the Fertiliser Ministry says it will come up with a concrete road map only after consultations with stakeholders concerned, it seems clear about broad contours of the policy.

"The Centre will decide how much of subsidy to give and that will become the final figure. On the basis of the funds available, we will decide how much of subsidy will be granted to each nutrient (like N, P, K that go into the making of fertilisers). Market prices will change accordingly," he said.

Presenting the Budget 2009-10, Finance Minister Pranab Mukherjee announced the Centre's intention to "move towards a nutrient-based subsidy regime" and provide subsidy directly to farmers, without, however, spelling out detailed modalities.

At present, the government controls the pricing of key fertilisers and offers funds to companies, known as fertiliser subsidy, to compensate them for selling key farm nutrients at the rates determined by it.