Govt clears sops for fertiliser industry

  • 12/06/2008

  • Business Standard (New Delhi)

In a bid to encourage the fertiliser industry to increase its production volumes, the government today extended the system of actual freight reimbursement to all types of fertilisers. Currently, only urea enjoys this concession. The Cabinet Committee on Economic Affairs (CCEA), which met here today, also approved a uniform nutrient subsidy policy to encourage farmers to use nutrient-based organic instead of regular nutrient like urea and DAP. nutrient-based organic instead of regular nutrient like urea and DAP. OTHER DECISIONS Nod to a scheme for training of the Indian team for Commonwealth Games 2010 with an outlay of Rs 687 crore Nod to the 'Development of Water Resources Information System' scheme with an estimated cost of Rs 234.30 crore Nod to the agreement signed between India and Syria for avoidance of double taxation Nod to Rs 3.5 lakh ex-gratia to the next of the kin of each person killed in the Bhagalpur riots of 1989 Announcing the CCEA decision, Finance Minister P Chidambaram said that the decision to provide subsidy for nutrients contained in all fertilisers would bring down the prices of several complex fertilisers. "The prices of complex fertilisers will come down by Rs 1,416 per tonne or Rs 70 per bag," Chidambaram said. The complex fertilisers are those which have at least two nutrients, while regular fertilisers have only one nutrient, like nitrogen (N), phosphorous (P) or potash (K). The uniform freight subsidy scheme, which is based on the payment of actual freight, Chidambaram said, would ensure easier availability of fertiliser in all parts of the country. Currently, fertiliser companies receive a fixed amount as freight irrespective of distance from the production centre to the sale point. The industry for long had been demanding payment of actual freight. Replying to questions on shortage of fertilisers, he said, "The ministry of fertilisers assures us that there is no shortage. Adequate fertilisers are available and being provided." The states, he added, should ensure that there are no movement bottlenecks. The policy announcement saw the stock prices of fertiliser companies like Rashtriya Chemicals and Fertilisers, National Fertilisers, Coromandel Fertilisers and Chambal Fertilisers rise at the BSE today. Govt raises paddy MSP to Rs 850 for FY09 The government has raised the minimum support price (MSP) of common variety paddy for the 2008-09 kharif procurement season (October-September) by Rs 105 a quintal to Rs 850 as an adhoc measure, while leaving the final decision on the CACP- recommended price of Rs 1,000 to the Prime Minister's Economic Advisory Council (EAC). The Commission for Agricultural Costs and Prices (CACP) is the advisory body on fixing the MSP for all the crops. The MSP of common variety paddy was Rs 645 a quintal and Rs 675 a quintal for higher-grade variety in 2007-08. A bonus of Rs 100 per quintal was offered over and above the MSP. "Some states like Gujarat, Madhya Pradesh and Orissa wanted less than Rs 1,000 a quintal as MSP, while some others wanted more than that. In view of divergent views, the matter was today referred to the EAC," Finance Minister P Chidambaram told reporters after a meeting of the Cabinet Committee on Economic Affairs. In fact, Himachal Pradesh wanted the MSP for paddy to be Rs 645 a quintal, Rs 100 less than the current price of Rs 745 a quintal, he added. For