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December 21, 2011

 

No roll back for decontrol of India's fertilisers prices

 

 

The government of India announced last week that it is not considering the rollback of the decontrol price regime in phosphatic and potassium crop nutrients.

 

The fertiliser ministry in April 2010 removed government controls on pricing of phosphatic (P) and potassium (K) fertilisers by introducing the Nutrient-Based Subsidy (NBS) policy.

 

"The NBS policy for P and K fertilisers is still in operation. Withdrawal of this policy is not under consideration in the government," Minister of State for Fertiliser Srikant Kumar Jena said.

 

The minister said that several representations have been received in respect of rise in the retail price of P and K fertilisers in the market.

 

In addition, he said, the Department of Fertilisers has also received a copy of the resolution passed in the Punjab Vidhan Sabha for rolling back the price rise of fertilisers.

 

As per the NBS policy, the maximum retail price (MRP) of P and K fertilisers has been left open to be fixed by the manufacturers or importers and the amount of subsidy is fixed by the government for each nutrient.

 

The subsidy for Diammonium phosphate (DAP) and potash is fixed at INR19,763 (US$375) per tonne and INR16,054 per tonne for the 2011-12 fiscal year.

 

Despite the subsidy given on these fertilisers, retail prices are ruling higher by more than 80-100% from last year's level.

 

Even after introduction of NBS, Jena said farmers have to pay about 50% of the actual cost of the fertilisers.

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