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Govt announces Rs22,000 cr additional subsidy to fertiliser industry

Govt announces Rs22,000 cr additional subsidy to fertiliser industry
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First Published: Wed, Aug 20 2008. 04 36 PM IST
Updated: Wed, Aug 20 2008. 04 36 PM IST
By PTI
New Delhi: The government has decided to release Rs22,000 crore subsidy in cash to the fertiliser industry this fiscal, apart from the budgetary allocation of Rs32,000 crore, chemicals and fertiliser minister Ram Vilas Paswan said today.
“Total fertiliser subsidy is estimated to be Rs1.19 lakh crore in 2008-09 while we have made available Rs54,000 crore cash payment to the industry,” Paswan told reporters after receiving a dividend of about Rs1.51 crore from public sector FCI Aravali Gypsum & Minerals India (FAGMIL).
He disclosed that Finance Ministry was not prepared for the Rs22,000-crore-subsidy in cash. Finance Ministry was of the view that subsidy be paid to banks through bonds. But banks were not willing as they would have to sell the bonds at a discount since companies would have got the payment in cash.
“Finance Ministry was putting ifs and buts. But Prime Minister said there should be timely payment of subsidy as it is a matter related to farmers. I thank Prime Minister for his personal intervention,” Paswan said.
He also said that the step has been taken as an interim measure for three months till the first supplementary is passed in Parliament.
Paswan said, “When I joined, the subsidy was Rs13,000 crore, which has now increased to Rs1,19,000 crore. But in last four years, not a single penny burden has been imposed on farmers as there was no increase in prices of fertilisers.
“We have reduced the prices of complex fertilisers by up to 19%.”
Asked whether the entire subsidy would be paid in cash, Paswan said there would be no financial problems to the companies and the government has ensured that they would receive the money even if there is a delay.
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First Published: Wed, Aug 20 2008. 04 36 PM IST