Four Ministers Quote Different Figures, But Govt Showcases It As Commitment To Farmers' Lot What is the anticipated fertilizer bill for 2008-09? Barely two weeks after the Budget was presented, you might think there would be a simple answer to this question. But, it turns out that there are at least four different figures being quoted by UPA's ministers in Parliament. When finance minister P Chidambaram presented the Budget, the figure mentioned in the documents was Rs 30,986.34 crore. On March 13, minister of state for chemicals and fertilizers B K Handique in his reply to a question in Lok Sabha said the fertilizer subsidy for 2008-09 was estimated to be Rs 60,649.36 crore. A day later, his cabinet minister, Ram Vilas Paswan, while replying to a question in the Rajya Sabha on March 14, said the subsidy for the coming year is likely to increase to Rs 75,000 crore. Finally, on Tuesday, minister of state for commerce Jairam Ramesh told the Lok Sabha that the estimated bill for 2008-09 was Rs 90,000 crore. But while a soaring fertilizer subsidy bill can put the government's fiscal management under pressure, it is not necessarily bad news in political terms. Ramesh made the point in Lok Sabha when he said the Rs 90,000 crore fertilizer subsidy only underlined UPA's commitment to farmers. He added that a Rs 1,200 crore subsidy for sulphate of potash for tobacco farmers was not an issue. While it has been argued that massive subsidies may curb government ability to efficiently allocate resources, even for politically important flagship schemes, this is not an immediate issue. For a poll-bound government, floating bonds or simply deferring hard decisions will make more sense than fiscal prudence. In Planning Commission meetings, Chidambaram has often argued that subsidies are badly targeted, reward inefficiency and constrain the government when it is faced with demands like increasing support prices. But arguments that make economic sense are not the order of the day. The FM himself has led the way with the Budget's Rs 60,000 crore farm bonanza. In recent days, Paswan's figure came in the context of an explanation for the rise in subsidy on urea, which he said was mainly because of the gap between domestic production and demand, necessitating imports of the commodity. Ramesh was speaking in response to a calling attention motion and said his ministry had proposed to the fertilizer ministry that sulphate of potash should also be covered under the fertilizer subsidy scheme. Despite the fact that the subsidy bill was already likely to be Rs 90,000 crore in 2008-09, the proposal had been accepted and would be put to the Cabinet for its approval, he said. Interestingly, Paswan's response to the Rajya Sabha question had also mentioned that the fertilizer subsidy bill for the current year, 2007-08, was estimated to be Rs 45,000 crore. Yet, the revised estimates presented in the Budget by Chidambaram was only Rs 30,501.01 crore, up from the Rs 22,451.01 crore provided in the budget for 2007-08. All of this raises questions about what the real subsidy bill is. If it is indeed Rs 90,000 crore, the latest figure quoted, that would mean the Budget would have to provide an extra Rs 60,000 crore over what has been provided for. The government has to give subsidies on fertilizers as it sells them at below the prices at which it either buys from private producers or imports. In the case of urea, the government buys it at an average cost of Rs 15 per kg, but sells it to the farmer at Rs 4.83 per kg. Similarly, DAP is bought by the government at an average cost of Rs 25 per kg but is sold to the farmer at Rs 9.3 per kg. The bill has been increasing sharply in recent years and if the latest figures being thrown about are any indication, it appears that it is all set to balloon very sharply in the coming year. Loan waiver: Govt takes relook after Sonia, Rahul pitch New Delhi: Despite concerns that enlarging the ambit of the Rs 60,000 crore mega farm loan waiver will make its rollout a more complicated affair, the government is busy looking at ways and means to put into effect what is a virtual "diktat' from the Congress high command. With Congress chief Sonia Gandhi following up son Rahul's "suggestion' that a distinction be drawn between dryland and irrigated areas at a rally on Monday where she expressed the hope that government would revise the two hectare "cap' in drier regions, the deal will almost certainly be reworked. Aware that poll compulsions, and not budgetary concerns or logistics, are bound to triumph as general elections approach, the government is looking to see how the waiver can be made more effective. This could mean increasing the number of beneficiaries and also better targetting of the largesse. Government may examine RBI and NABARD data on small and marginal farmers in dryland areas to see how some differentiated deal for this segment, which is highly indebted, can be better benefitted. This might be fairly vital now that the Congress leadership has spoken its mind. While increasing the size of the package may be fiscally challenging, the job has to be done. So far, finance minister P Chidambaram has hoped that revenue bouyancy will fund the package, but other measures are not off the table. With Congress's first family reflecting the intense feedback it has recieved from party MPs, the pressure on the FM is bound to mount. A day after Sonia struck a populist chord at a rally in Osmanabad, the FM remained carefully non-committal. "Let's see, where is the hurry? We have time,' Chidambaram said when asked whether the farm package could be enlarged. With Congress viewing the waiver as a major election hook, it is not unlikely that the changes 10, Janpath is seeking will be carried out by the time the finance bill is voted on. The UPA lead player's calculations are that a profarmer hype will help it carry the day at the hustings. The accounting for the waiver has anyway been spread over three years and glitches in its implementation may not show up by the time polls come along. Then again, the party could always argue that it will do more if voted back to power. Agriculture minister Sharad Pawar said the government was yet to react to the clamour for a bigger and differentiated package as it needed to be clear how much resources could be allocated. "The finance ministry has to see how much can be set aside for this purpose,' he said. He also pointed to the implementation of the farm deal as being important for it to work on the ground. But Sonia's argument that areas like Vidarbha and Marathwada might need more attention cannnot be contested by the Maratha strongman whose stakes in those regions are just as high. As elections approach, Pawar would be wary of being outflanked by his coalition partner.