New Delhi: Spiralling prices in the global market will push the fertilizer subsidy bill by more than 100% to Rs1,00,000 crore, Chemicals and Fertiliser Minister Ram Vilas Paswan has said.
“Last year we paid Rs45,000 crore subsidy. This year, we started from Rs60,000 crore and today subsidy is estimated to increase to Rs1,00,00 crore for the same quantity of fertilizer,” the Minister told PTI.
Paswan said he had already written to Prime Minister Manmohan Singh and Finance Minister P Chidambaram demanding higher fertiliser subsidy.
A surge in the fertiliser subsidy bill will impact the fiscal deficit, which the Centre plans to reduce from 3.1% of the GDP in 2007-08 to 2.5% in the current fiscal.
Paswan, however, ruled out any increase in fertilizer prices, pointing out that “if you increase the rate of fertilizer, the indirect effect would be on the price of food grains” as cost of production would go up.
The government provides subsidy on indigenous as well as imported fertilisers to benefit the farmers and ensure that price of foodgrain remain within the reach of common man and the manufacturers get reasonable return on their investment.
Referring to rising prices in the global market, the minister said the cost of importing DAP is Rs51,000 a tonne, while it is supplied to farmers at Rs9,300. In case of urea, he said as against import cost of Rs22,000 a tonne, the government is supplying farmers at Rs4,830.
When asked about solution, Paswan said as the government has subdised the prices of petrol, diesel and cooking gas which are very high in the international market, “the way out for fertilizer is also subsidy”.