Fertiliser subsidies mount

The Ministry Of Chemicals and Fertilisers is gearing up for a substantial increase in the fertiliser subsidy bill in 2008-09. Ministry sources told BT that fresh estimates peg the subsidy bill at about Rs 60,000 crore, an increase of over 30 per cent (this year, it is Rs 45,000 crore).

The ministry has already requested the Ministry of Finance to make a budgetary allocation of Rs 50,000 crore for fertiliser subsidies. The main culprit, sources say, is the rising prices of fertiliser products (like potassic and phosphate fertilisers) globally. And since India is import-dependent, the subsidy bill can only mount. The ministry plans to combat the problem by encouraging the domestic industry to increase production by shifting to import parity pricing.

— Rishi Joshi