Subsidy on DAP fertiliser increased
Tribune News Service

NEW DELHI, Dec 28 — The Government has decided to enhance the subsidy for the phosphatic and potassic fertilisers for Kharif, 1998, and Rabi, 1998-99, season.

The revised rates of concession for Kharif, 1998, will be Rs 4,400 per tonne, instead of the existing Rs 3,500 per tonne, for indigenous DAP, Rs 3,400 per tonne (Rs 2,000 per tonne) for imported DAP and Rs 3,000 per tonne (Rs 2,000) for MOP.

In the case of complex fertilisers, weightage is being given for both nitrogen and phosphorus contents of DAP while determining the concessions which would result in substantial increase in their concession rates, an official release said here today.

The rates of concession for complexes during Kharif 1998, would range from Rs 2,477 to Rs 4071 per tonne against the Rabi, 1997-98 rates which ranged from Rs 1522 to Rs 2968 per tonne.

The Government has also decided that keeping in view the volatility of the foreign exchange in the last several months, the rates of concession for Rabi, 1998-99 would be decided on a quarterly basis after taking into account the actual behaviour of the exchange rates and the rates of ammonia and phosphoric acid. Pending this, 80 per cent ‘on account’ payments would be made to manufacturers and importers at the Kharif 1998 rates except in the case of SSP where the concession has been enhanced from Rs 600 to Rs 900 per tonne. For the second half of Rabi, 1998-99 (January 1, 1999 to March 31, 1999), the rates of concession for making 80 per cent on account payments would be the final concession worked out for the first half of Rabi, 1998-99.

The Government had earlier fixed the maximum retail prices of P and K fertilisers for Kharif, 1998, and Rabi 1998-99 at the same levels as in Rabi, 1997-98. While fixing the prices, the Government had indicated that it would bear the concession necessary to keep the prices pegged at that level. To help determine the rates of concession, the Government had entrusted the work of cost evaluation to the Bureau of Industrial Costs and Prices. The revised rates of concession applicable to Kharif, 1998, and Rabi, 1998-99 have been announced by the Government after considering the report of the BICP.

The concession scheme on phosphatic and potassic fertilisers was introduced by the Government from Rabi, 1992, to cushion the impact of decontrol which led to increase in the price of P and K fertilisers and consequent reduction in their consumption. In its current form, Government fixes the maximum retail prices at which these fertilisers are to be sold and a concession is paid to the manufacturers and importers to cover the difference between the maximum retail price and the cost of sale or import.

The Government has also decided to maintain a buffer stock of two lakh tonnes of DAP and 55,000 tonnes of MOP to meet emergent needs.