Budget likely to bring sops for complex fertilisers

The Budget may bring in bad news for urea manufacturers, with the government likely to expand the list of fertilisers eligible for subsidy. The move will benefit fertiliser companies manufacturing complex fertilisers. Under the new norms, budgetary provision for this category may be hiked substantially instead of simple fertilisers like DAP, MoP and urea.

The group of ministers (GoM) for agriculture headed by agriculture minister Sharad Pawar is understood to have submitted its report on the issue. The recommendations of the GoM include single super phosphate (SSP) and new generation products like water-soluble fertilisers that contain other plant nutrients such as sulphur, zinc and calcium which enrich the soil, sources in the agriculture ministry said.

The high-powered group has also recommended higher susbsidy provision for this category, the sources said. The proposal, if accepted, could put an additional subsidy burden of Rs 1,200 crore on exchequer.

?Of the 90 products that are approved under the Fertiliser Control Order, 1985, only 15 are currently eligible for subsidy. The government intends to explore the possibilities of including more fertilisers from the approved list to encourage the use of nutrient-based fertilisers,? chemicals and fertilisers minister Ram Vilas Paswan said.

The major share of the current fertiliser subsidy, which is expected to go up to Rs 64,000 crore this fiscal from last year?s Rs 45,000 crore, goes to urea manufacturers for supplying to farmers. The finance ministry is not ready to enhance the subsidy from the current level of Rs 45,000 crore. The budgetary allocation for the last year was Rs 22,452 crore.

The government?s new plans may bring in a more equitable distribution of fertiliser subsidy among various segments and enhance soil fertility. Such an approach provides a mix of nutrients like nitrogen, phosphorous and potassium and secondary nutrients like sulphur, calcium, magnisium, zinc, boron, iron through fortification and enrichment of different fertiliser grades, fertiliser department officials say.