Oct. 27, 2016
India’s ministry of chemicals and fertilizers on Wednesday said it has sought an additional allocation of Rs.20,000 crore from the finance ministry for fertiliser subsidy.
InfraCircle had on 20 September reported that the ministry plans to approach the finance ministry to enhance subsidy allocation towards soil nutrients and rationalise import duty on key raw materials used in manufacturing.“The fertiliser subsidy budget for this year is Rs.75,000 crore. We have now asked for additional Rs.20,000 crore from the finance ministry under supplementary grants,” said fertiliser secretary Vijay Shankar Pandey. This will be over and above the government’s provision of Rs.70,000 crore for fertiliser subsidies in the Union budget of 2016-17.
According to information available on the website of the fertiliser ministry, it had sought Rs.28,000 crore for last year’s revised estimates, but the demand was not accepted by the finance ministry.
Meanwhile, fertiliser minister Ananth Kumar said the government is aggressively working to implement direct benefit transfer (DBT) in fertilisers.“There are pilots being undertaken in 16 districts all over the country and the initial reports are very encouraging. We believe by the next kharif season whatever information we receive, we would compile and it will lay a strong ground for introducing DBT of fertiliser subsidy,” said Kumar.
The pilots are being conducted in two phases, with the first one already on. The next phase of pilot will be undertaken in eight other districts and will be scheduled for kharif season next year. The purpose behind DBT in fertiliser is to capture data at the sales level to find out buyers, and data related to urea and other complex fertilisers.
Analysts believe that seeking of additional subsidy will be a positive step for the industry.“Industry has got a bit of relief with fall in gas prices. Also, backlog subsidy burden would have gone down. Hence, subject to release of cash, company’s position will be far better than past wherein they had to resort to special banking arrangements,” said K. Ravichandran, senior vice-president and co-head, corporate ratings at Icra Ltd.