New fertiliser subsidy regime to be implemented gradually
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13/02/2008
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Indian Express (New Delhi)
NEW DELHI, FEBRUARY 11: The UPA Government's proposed shift to a nutrient-based fertilisers subsidy from a product-based regime will be a gradual one in the 2008 -09 financial year. According to sources, since the new subsidy regime may lead to price revision of the fertiliser products, the "implementation of the new regime could be gradual'. A Group of Ministers (GoM) headed by Agriculture Minister Sharad Pawar will be meeting on Tuesday to finalise the strategy for the implementation of the new subsidy regime from the next financial year. The GoM will be meeting second time after the PMO had asked the former to finalise its recommendations before January end so as to assist the budget preparations. However, given the tussle between the Fertiliser and Finance Departments over the issue of pricing of the individual nutrients, the GoM could not finalise the pricing of fertilisers despite consensus over implementing the nutrient-based subsidy regime. While the Finance Ministry is pushing for pricing arrangement that could lead to a reduction in the fertiliser subsidy bill for the Government, the Fertiliser Department does not want to tinker with the prices of urea, di-ammonium phosphate (DAP), and muriate of potash (MoP), which are the primary sources for nitrogen (N), potassium (K), and phosphorus (P) nutrients. In fact, the Fertiliser Department wants to maintain the subsidy on N, P and K nutrients in other complex fertilisers containing them at the level equal to the subsidy on these nutrients in urea, DAP and MoP. Since the nutrient-based subsidy regime will extend the price concessions from existing 15 fertiliser products to the remaining fertiliser products, the arrangement suggested by the department is likely to result in an increased fertiliser subsidy bill for the Government. The GoM is likely to reconcile the pricing formula for the implementation of the nutrient-based subsidy regime on Tuesday.