Government Clarifies That There Is No Proposal At Present To Decrease Amount Of Fertilizers Subsidies

Union Minister for Chemicals and Fertilizers, D.V. Sadananda Gowda, while giving a written reply to a question on subsidies on fertilizers, in Rajya Sabha today, stated that there is no proposal at present to decrease the amount of subsidies on fertilizers. In a written reply to another question in Rajya Sabha today, Gowda stated that there is no proposal for fixing a Nutrient - Based Subsidy rate (NBS) for urea and hence, question does not arise to decontrol the prices of urea in the market.

The Minister stated that for Potassic & Phosphatic (P&K) fertilizers, the Government is implementing Nutrient Based Subsidy (NBS) Scheme w.e.f 1.4.2010. Under the NBS Policy, the Government announces a fixed rate of subsidy (in Rs. per Kg basis), on each nutrient of subsidized P&K fertilizers, namely Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S), on annual basis taking into account all relevant factors including international prices, exchange rate, inventory level and prevailing Maximum Retail Prices of P&K fertilizers. The per Kg subsidy rates on the nutrients N, P, K, S are converted into per Tonne subsidy on the various subsidized P&K fertilizers covered under NBS Policy.
He further noted that urea is being provided to the farmers at a statutorily notified Maximum Retail Price (MRP). The MRP of 45 kg bag of Urea is Rs. 242 per bag (exclusive of charges towards neem coating and taxes as applicable) and the MRP of 50 kg bag of Urea is Rs. 268 per bag (exclusive of charges towards neem coating and taxes as applicable). The difference between the delivered cost of fertilizers at farm gate and net market realization by the urea units is given as subsidy to the urea manufacturer / importer by the Government of India.

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