MOVE TO ENCOURAGE RAISING LONG-TERM OUTPUT, CUT SOP BILL BY Rs 1,164 CR IN A move aimed at encouraging the fertiliser industry to raise its production outlay in the longer term, the government on Thursday announced a concession scheme for decontrolled phosphatic and potassic (P&K) fertilisers. The decision taken by the Cabinet Committee on Economic Affairs (CCEA) will fix concessions to producers with reference to global prices. The government expects this to reduce its Rs 95,000-crore subsidy bill by Rs 1,163.79 crore. The scheme will apply retrospectively from April 1, 2008. It is based on a revised framework by the Tariff Commission, which has rationalised the methods of concession computation and costing. "The CCEA has approved the department of fertiliser's proposal on a concession scheme for decontrolled P&K fertilisers,' minister for state in the Prime Minister's Office (PMO) Prithviraj Chauhan said. The decision will allow the industry to finally claim pending concessions from the government. The policy replaces the earlier one which expired on March 31. "The scheme will provide a longterm perspective to the fertiliser industry to seek out new and cheaper sources of phosphatic and potassic raw material, intermediaries and finished fertilisers and will thereby help the Indian farmers meet their nutrient requirements,' Mr Chavan said. Under the new scheme, indigenous di-ammonium phosphate (DAP) has been brought on a par with imported DAP for calculating concessions. "Providing concession to indigenous DAP on the basis of import parity price will ensure competitiveness and provide a rational basis for payment of concession,' Mr Chavan said. This is a decision unlikely to make indigenous producers, who have been consistently demanding a comparative advantage, happy. However, it is a WTO requirement the government had to comply with. The CCEA further decided that the department of fertiliser would maintain a buffer stock of 3.5 lakh tonnes of DAP and 1 lakh tonnes of MOP to meet any exigency. Fertiliser secretary JS Sarma said there would be no impact on the MRP of fertilisers. To expand the basket of phosphatic fertiliser, the Centre also approved inclusion of triple super phosphate (TSP), a cheaper substitute for DAP, in the new concession scheme. To encourage balanced use of fertilisers, ammonium sulphate has been included in the new scheme by providing 25% subsidy on delivered cost. An outlay of Rs 429.85 crore was also approved towards launching a centrally-sponsored scheme on a national project on management of soil health and fertility. An outlay of Rs 706.40 crore was also approved for strengthening the country's agricultural marketing infrastructure, grading and standardisation. The Cabinet also approved a cruise shipping policy to increase India's share in the global shipping tourism business, besides the extension of grants-in-aid for the pharmaceutical industry to promote R&D and clinical trial of drugs to control the widespread effects of tropical diseases like tuberculosis and malaria. The government also gave its nod to budgetary support of Rs 48.52 crore for liquidation of outstanding statutory dues of 10 sick central PSUs. SOWING THE SEEDS Concession scheme will apply retrospectively from April 1, 2008 Decision will allow fertiliser industry to claim pending concessions/subsidies from government Move to provide concessions to indigenous DAP on basis of import parity likely to make domestic producers unhappy