Finance Minister Pranab Mukherjee today said fertiliser prices are moderate and the government will not allow them to reach a level where they become unaffordable.
"Fertiliser prices are moderate and there is no question of allowing prices to go beyond the reach of farmers," Mukherjee told reporters on the sidelines of a conference here.
The government had implemented the Nutrient-Based Subsidy (NBS) from April this year, freeing the prices of phosphatic and potassic fertilisers to rein in the subsidy burden and promote balanced usage of the crop nutrients. It, however, still holds the power to control urea prices.
However, the maximum retail price of urea was increased to Rs 5,310 per tonne from Rs 4,830 earlier.
The Finance Minister's comment assumes importance as the NBS regime allows fertiliser makers to determine the retail prices of subsidised crop nutrients, other than urea, at the farmgate level, leaving room for fixing prices in sync with market dynamics.
According to the Fertiliser Ministry, India needs 136.64 lakh tonnes of urea, 68.74 lakh tonnes of DAP, 22.98 lakh tonnes of MOP and 48.69 lakh tonnes of NPK for the current kharif season alone.
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The country would require to import 30 lakh tonnes (LT) of urea, 49.8 LT of DAP, 32.74 LT of MOP and 4.29 LT of NPK during the season.
India had imported 52.08 LT of urea, 59.87 LT of DAP and 47.6 LT of MOP in the entire 2009-10 financial year.