New Delhi, March 1 (IANS) In a bid to control the widening fiscal deficit, the government Thursday said it will reduce subsidies on phosphate and potash-based fertilisers by over 20 percent in the next financial year beginning April 1.
The union cabinet headed by Prime Minister Manmohan Singh approved the fertiliser ministry’s proposal to cut subsidies.
Subsides to Di-Ammonium Phosphate (DAP) and Muriate of Potash (MoP) fertilisers will be reduced respectively by 27.4 percent and 10 percent.
According to an official statement released after the cabinet meeting here, subsidy on DAP will be reduced to Rs.14,350 per tonne in 2012-13 from the Rs.19,763 per tonne in the current financial year, while subsidies on Muriate of Potash will be slashed to Rs.14,440 per tonne from Rs.16,054 per tonne.
“At the announced rate, total subsidy outgo for Phosphate and Potash (P&K) fertilisers for the financial year 2012-13 would be reduced by more than 20 percent,” the statement said.
The outgo will depend on the overall consumption of fertilisers.
However, the subsidies on the most used fertiliser urea will remain unchanged.
Since India imports almost its entire supply of non-urea fertilizers, the reduction could help bring down the fertilizer subsidy bill substantially. The fertilizer subsidy bill for the current fiscal would be around Rs.90,000 crore.
