Fertiliser subsidy arrear has reduced to Rs 23,000 crore now, and more funds will be sought from the finance ministry to clear the backlog completely, Fertiliser Minister Ananth Kumar said today.
The direct benefit transfer (DBT) for fertiliser subsidy, which is being implemented in some states, will be rolled out across the country from April 1, he said.
Addressing a global event here, Kumar said, "I am happy to note that backlog of subsidy which was Rs 44,000 crore (in 2014) has been reduced to Rs 23,000 crore".
"Now, I am going to request to the finance minister to clear this arrear in one go. Once for all, finish this backlog," Kumar added.
On losses being incurred by urea plants, the minister said the government is seriously considering revision of fixed cost of urea and giving amnesty to meet the energy norm.
The government has not revised the fixed cost of urea for last 15 years, due to which the companies have been incurring losses. The last revision was done way back in 2002.
Also, urea plants have to meet the energy norms from April onwards and as a result some plants are shut to undertake energy efficiency exercise. This has been affecting the urea production.
On industry's demand to reduce GST on fertiliser raw materials, the minister assured that he will take up the matter with the finance ministry.
"We will request for reduction of GST on ammonia and phosphoric acid from 18 per cent. We will take up this matter," he said.
The Goods and Services Tax (GST) on fertiliser is kept at 5 per cent for both domestic and imported one, while its raw materials are taxed at 18 per cent.
In the last GST Council meeting, the GST on one of the fertiliser raw materials Sulphur was reduced to 5 per cent from 18 per cent. The fertiliser industry has demanded the same reduction of tax on ammonia and phosphoric acid.
India produces 24 million tonnes of urea and imports 6-7 million tonnes to meet the gap. Urea is highly subsided at Rs 5,360 per tonne, while its production cost is Rs 16,000 per tonne. The difference is paid to manufacturers as subsidy. Non-urea fertilisers like potash are largely imported.
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