Finance Minister Pranab Mukherjee today assured that the government would try to ensure that farmers do not have to spend more on fertilisers next fiscal, even though the government has removed the maximum retail price (MRP) system.
"Government will ensure that nutrient based fertiliser prices for transition year 2010-11, will remain around MRPs currently prevailing," Mukherjee said while presenting the Budget for the year 2010-11.
The nutrient based subsidy policy for fertiliser sector would become effective from April 1 this year.
At present, the MRP of Diammonium Phosphate (DAP) is Rs 935 a quintal and that of Muriate of Potash (MOP) is Rs 445.50 a quintal. While urea MRP has been raised to Rs 531 from Rs 483 a quintal from April 1.
The policy is expected to promote balanced fertilisation through new fortified products and focus on extension services by the fertiliser industry, he said.
"This (the new policy) will lead to an increase in agricultural productivity and consequently better returns for the farmers. Over time, the policy is expected to reduce volatility in the demand for fertiliser subsidy in addition to containing the subsidy bill," he said.
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India produced 199.2 lakh tonnes of urea in 2008-09, 29.9 lakh tonnes of DAP and 68.5 lakh tonnes of complex fertilisers, while imported 56.7 lakh tonnes urea, 61.9 lakh tonnes of DAP and 56.7 lakh tonnes of MOP.
The import of urea is likely to be 44.9 lakh tonnes in 2009-10, 55.6 lakh tonnes DAP and 42.3 lakh tonnes of MOP.