The Hindu : National : Fertilizer subsidy to be hiked

Online edition of India's National Newspaper
Saturday, Jun 19, 2004

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National

Fertilizer subsidy to be hiked

By Our Special Correspondent

NEW DELHI, JUNE 18. After oil prices, the United Progressive Alliance Government will have to deal with fertilizer prices. The Fertilizer Ministry has asked for a hike in the subsidy from Rs. 12,400 crores last year to Rs. 17,400 crores in the current fiscal — 2004-5.

The Fertilizer Minister, Ram Vilas Paswan, said today that this increase in subsidy is needed due to the steep rise in the world prices of potash and phosphoric acid and the domestic cost of production. He said a subsidy on phosphatic fertilizers is already estimated at Rs. 4,000 crores. A price hike of over 25 per cent is needed owing to the reliance on imported phosphoric acid and potash.

Mr. Paswan said the Ministry has agreed to give a subsidy on a provisional basis bench-marked on last year's import prices.

He said an increase of one dollar in world prices of phosphoric acid and potash increases the subsidy by Rs. nine crores. India is the world's largest consumer of phosphoric acid and prices have increased from $ 356 a tonne to $460 a tonne this season. After prolonged negotiations with producers largely in Morocco, the buyers in India managed to get the price reduced to $ 402 a tonne.

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