November 16, 2020

 

India earmarks US$8.71 billion in fertiliser subsidies


 

Nirmala Sitharaman, India's Finance Minister said the government has allocated an additional US$8.71 billion in subsidies for fertiliser for the current fiscal year that started in April, Reuters reported.

 

The summer season saw higher than normal fertiliser use following favourable monsoon rains, encouraging India's farmers to plant more crops such as soybean and corn.

 

Sitharaman said the additional subsidies have been announced to ensure enough fertiliser for farmers, while announcing a third fiscal stimulus to assist industries struggling in the COVID-19 pandemic.

 

Satish Chander, director general of the Fertiliser Association of India, said the announcement was what they hoped for.

 

The current 2020-21 fiscal year budget announced in February saw fertisilier subsidy allocation cut by 11% to INR 713.09 billion (~US$9.5 billion; INR 100 = US$1.30).

 

India usually exceeds its fertiliser subsidy bill because of lower budget allocations, so it gets rolled over to the next year as the government requests banks to fund subsidy gaps. This results in delayed subsidy payments to fertiliser firms.

 

K Ravichandran, senior vice president of ICRA, the Indian arm of global ratings company Moody's Investors Service, said the additional allocation will settle subsidy delay problems that have affected the fertiliser industry.

 

The government of India compensates state and private fertiliser companies for selling crop nutrients to farmers at discounted prices.

 

-      Reuters

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