The Finance Ministry has signaled reduction in the fertilizer subsidy over the next two financial years. It has also advocated increase in the statutory retail price of urea. 8The blueprint for fertilizer subsidy reforms is incorporated in the Medium Term Expenditure Framework (MTEF) Statement presented by Finance Minister P. Chidambaram to Parliament on 27th August. 8MTEF says: “Constrained by the fiscal roadmap, Government faces the challenge of containing outlay on the other Subsidies viz. Petroleum and Fertilizer within the sustainable limits.” 8It adds: “On the pricing issue, there is a need to undertake pricing reforms in the urea sector. This is not only essential for reducing the subsidy bill, but is also necessary for a more balanced usage pattern of N, P and K Fertilizers.” 8MTEF has estimated reduction in estimated fertilizer subsidy from Rs 65972 crore allocated in the Budget for 2013-14 to Rs 62274 crore in 2014-15. It has reckoned marginal increase in subsidy provision to Rs 63628 crore for 2015-16. 8The Budget for 2013-14 provided for flat growth in fertilizer subsidy over the preceding year. As pointed out by the industry, this allocation is woefully inadequate and has already been exhausted in clearing the subsidy arrears and in making reimbursement for subsidy in the first quarter of current fiscal
Posted on: Thu, 29 Aug 2013 08:08:38 +0000
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