The government owes more than Rs 43,000 crore to the fertiliser industry on account of subsidy, Parliament was informed today.
Urea is a controlled fertiliser and its selling price is fixed at Rs 5,360 per tonne, with government paying the difference between the cost of production and selling price as subsidy to the manufacturers.
The subsidy on phosphoric and potassic (P&K) fertilisers is fixed and the manufacturers are free to decide the selling price.
As per Minister of State for Chemicals and Fertilisers Hansraj Gangaram Ahir’s written reply in Lok Sabha, the carry over subsidy arrears in the year 2016-17 is Rs 43,356.23 crore.
Out of this, Rs 23,730 crore is on indigenous urea, Rs 10,358.41 crore on indigenous P&K fertilisers, Rs 6,159.95 crore on imported P&K fertilisers and Rs 3,107.87 crore on imported urea, the minister said.
Ahir also informed that it has been proposed to introduce direct benefit transfer (DBT) in fertiliser subsidy on pilot basis.
The fertiliser subsidy has pegged at Rs 70,000 crore for 2016-17, lower than Rs 72,437.58 crore estimated for this financial year.
In fertiliser subsidy, the government has allocated Rs 51,000 crore for urea and Rs 19,000 crore for decontrolled P&K fertilisers.