Fertilizer subsidy will increase by Rs. 15,000 crore

The Union Fertilizer Ministry on Monday said decision on decontrolling the urea sector would be taken within the current financial year.

“The Cabinet is yet to consider decontrolling the urea sector. I expect, whatever the decision will be, it will be taken before the current financial year,” Fertilizer Secretary Sutanu Behuria told reporters on the sidelines of a conference here.

The fertilizer industry has been pressing the government to decontrol the urea sector in line with the potassic and phosphetic fertilizers.

With the introduction of the nutrient based subsidy scheme, with effect from April this year, the government has already freed potassic and phosphetic fertilizers. However, in relation to urea, including its price and movement, it is still controlled by the government. Urea constitutes almost 50 per cent of India's fertilizer consumption.

Declining to comment on the likely changes in the decontrolled era from the current controlled regime, he said, “what exactly will happen will be discussed at the meeting of the Group of Ministers and then in the Cabinet. We don't know what will emerge.''

“However, we want to make sure that the price does not go to an extent where the farmers cannot buy the fertilizer,” Mr. Behuria added.

On whether the government would like to appoint a regulator in that case, Mr. Behuria said, “It is too early. If there is a need for any regulator, it will come.''

Asked when the meeting of the Group of Ministers would take place, Mr. Behuria said, “the Finance Ministry has to take a decision on when it will happen. The date has not been finalised yet.''

Meanwhile, Mr. Behuria said the fertilizer subsidy for the current fiscal would be around Rs.67,000 crore, up by Rs.15,000 crore from the budget estimates of Rs.52,000 crore.

“Subsidy is determined via various factors. Because of good monsoon, consumption will increase and this will lead to escalation in subsidy,” he said.

India has contracted to import six million tonnes of urea and eight million tonnes of DAP for the current fiscal.

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