NEW DELHI: The Cabinet Committee on Economic Affairs on Thursday approved the concession scheme of the Department of Fertiliser on de-controlled phosphatic and potassic fertilizers, which would reduce the subsidy bill by Rs. 1,163 crore, besides encouraging the industry to raise production.
Minister of State in the Prime Minister’s Office, Prithviraj Chavan, told newsmen here that the concession scheme , which lapsed on March 31, included DAP, MOP, MAP and 11 grades of complex fertilizers. The scheme would come into effect retrospectively from April 1, based on a revised framework.
The scheme, he said, was based on the rationalisation of methodology and costing as estimated by the Tariff Commission. Under the scheme, indigenous DAP has been brought on a par with imported DAP for calculating concessions.
The CCEA also decided that the Department of Fertiliser would maintain a buffer stock of 3.5 lakh tonnes of DAP and one lakh tonnes of MOP to meet any exigency. Fertiliser Secretary J. S. Sarma said DAP and complexes production would be encouraged through this new scheme.
No impact on MRP
He said there would be no impact on the maximum retail price (MRP) of fertilizers. At present, the Centre is giving fertilizer subsidy in the range of 65-85 per cent and farmers are paying only about 15-20 per cent of the actual cost. He also stressed that there was no fertilizer shortage in the country.
To expand the basket of phosphatic fertilizer, the Centre also approved inclusion of triple super phosphate (TSP), which is a cheaper substitute for DAP, in the new concession scheme. Similarly, with a view to encouraging balanced use of fertilizers, ammonium sulphate has been included in the new scheme by providing 25 per cent subsidy on delivered cost. The CCEA also approved concession/subsidy on sulphur nutrient in order to cushion the farmers from high world prices.