Plan panel favours nutrient based subsidy on fertilisers

Plan panel favours nutrient based subsidy on fertilisers New Delhi: Planning Commission on Wednesday said it is in favour of nutrient based subsidy (NBS) on fertilisers and there should be a balance between different kinds of crop nutrients to maintain soil health.

"What our view on subsidy is... We are not in favour of open ended subsidy. We have always been in favour of nutrient based subsidy," Planning Commission Deputy Chairman Montek Singh Ahluwalia said on the sidelines of a conference of State Planning Commission/Boards.

He said fertiliser prices should be variable in fixing NBS to balance the different kinds of nutrients so that there is a consistency.

Under the NBS regime introduced on April 1, 2010 retail prices of 22 grades of phosphatic and potassic fertilisers have been freed, but the government reimburses fertiliser firms for selling the indigenous or imported crop nutrients at lower price to farmers.

The decision on rate of withdrawal on subsidy or phasing out can be taken after balancing it, Ahluwalia said.

"Once you have balanced it, the nutrient based subsidy, you can then impose whatever rate of withdrawal you want. You want to phase it out in one year, you want to abolish it straight way, you want to phase it out in four years... So its a big and complex job but it is an important job," he added.

On the meeting with the Boards, Ahluwalia said: "We are using this opportunity to listen to state governments. Planning, in my view, should not be a top-down process..."

He said it is an opportunity to share ideas about what is working and what is not working. "...Across state there are huge variety. All kind of experiences have been tried; they are working very well in some parts of the country, not so well in other parts. We need to document that and I think states are now increasingly aware of this difference."

He said states themselves visit each other and send people to see how well something is happening in other states.

"I think the planning commission should facilitate that as much as possible," Ahluwalia said.