Cabinet to decide on fertiliser subsidy

Last Updated: Wednesday, February 17, 2010 - 22:17

New Delhi: Amid opposition from key allies,
including Fertiliser Minister and DMK leader M K Alagiri, the
government is likely to take a decision on whether or not to
implement the nutrient-based subsidy for the fertiliser
sector.

"The Cabinet will take the decision tomorrow on whether
to introduce the new nutrient-based subsidy (NBS) scheme from
next year," a senior government official said.

Last week, Fertliser Minister M K Alagiri had met Finance
Minister Pranab Mukherjee and sought deferring NBS as the
industry did not give any written assurance on not increasing
prices.

Fertilisers are sold at government-fixed prices, which
are lower than their costs of production or import. The
difference is met through subsidy.

At present, the subsidy is given on product basis, like
subsidy on urea and DAP. The government plans to replace it
with NBS under which the subsidy is given on the basis
nutrients like nitrogen phosphorus and potash in the product.

The NBS does away with maximum retail price (MRP). It
proposes to replace the current system of giving subsidy to
the industry with direct assistance to farmers.

Besides, the government also wanted to cap the subsidy at
Rs 50,000 crore, sources said. The fertiliser subsidy last
fiscal stood at over Rs 1 lakh crore.

PTI



First Published: Wednesday, February 17, 2010 - 22:17
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