Nearly two months after proposing an overhaul in the fertiliser subsidy policy, the government has constituted a Group of Ministers (GoM) under Finance Minister Pranab Mukherjee to suggest ways to shift to the new regime and to provide subsidy directly to farmers.
The 2009-10 Budget had announced moving towards a regime where subsidy would be granted on fertiliser nutrients instead of the current practice of providing dole-out on prices of fertilisers. It also proposed that fertiliser subsidy be provided directly to the farmers as a long-term goal.
“A GoM has been constituted under the chairmanship of Pranab Mukherjee to look into all aspects of nutrient-based subsidy,” a top government official said, who did not wish to be named.
The GoM will decide on when to shift to the new subsidy regime and also the timeframe for moving to the system of granting fertiliser dole-out directly to farmers, he added.
Another official said the GoM may meet shortly to take up the issues.
Already, the fertiliser ministry has convened meetings with senior officials from different states and the industry separately to “sensitise” them about the proposed system.
At present, the government controls the pricing of key fertilisers and offers funds to companies, known as fertiliser subsidy, to compensate them for selling key farm nutrients at the rates determined by it.
India’s fertiliser subsidy surged to Rs 1,17,000 crore in the last financial year on the unprecedented rise in its import bill following skyrocketing global prices, from Rs 45,659 crore a year before.
The record rise in subsidy bill paved the way for a fresh debate among policymakers with the fertiliser ministry saying such kind of a burden was not sustainable for a long time.
