The department of fertilisers (DoF) is working on an arrangement with a consortium of PSBs for a loan amounting to R25,000 crore to pay outstanding fertiliser subsidy dues to the manufacturers. Urea manufacturers receive subsidy under the new pricing scheme (NPS) to cover the differential between the cost of production and distribution, and maximum retail price controlled at a low level. DAP and complex fertiliser manufacturers receive subsidies under the nutrient-based scheme (NBS)—a ‘fixed’ amount linked to nutrient content, viz nitrogen, phosphate and potash. The budget for 2012-13 provided for an allocation of around R60,000 crore towards fertiliser subsidies. These funds were exhausted in the first 4 months of the current fiscal. DoF needs an additional Rs 40,000 crore to...
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Tag Archives: ‘NBS’
Missing links in the fertiliser subsidy scheme
In the Budget for 2012-13, the finance minister had announced tracking the movement of fertilisers from retailer to farmers and linking part of subsidy payment to manufacturers to the sale of fertilisers to farmers by retailers. Under the extant dispensation, 85-90% of the subsidy amount (fixed amount on DAP and NP/NPK fertilisers and excess of cost over controlled MRP for urea) is paid to manufacturer on ‘receipt of material in district’. From November 2012, producers are to get subsidy payments only on confirmation of ‘receipt of fertiliser by the retailer’. Actual payments are, however, stuck as the department of fertilisers (DoF) has no money, having exhausted allocated funds. In the mid-year economic analysis of 2012-13, the finance ministry came out...
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