New Delhi, July 11
The United Progressive Alliance (UPA) government may soon have to face embarrassment in Parliament and in its rural constituency as the prices of fertilisers are all set to rise in the coming days.
The budgetary allocation for fertiliser subsidy in the present Budget has not been increased despite sharp rise in the expected subsidy bill for the current fiscal year due to rise in the cost of production and marginal increase in demand for fertilisers in comparison to previous dry year.
The fertiliser producers who are tight-lipped for the time being claimed, “We are expecting that the Opposition parties and the ruling alliance partners will soon raise this politically-sensitive issue in the Parliament and the government may be forced to review its subsidy allocations, otherwise we will have to increase fertiliser prices by 5-10 per cent.”
In fact, Finance Minister P. Chidambaram has allocated fertiliser subsidy amounting Rs 12,662.15 crore at the same level as was granted by his predecessor Mr Jaswant Singh, in the interim Budget presented in February this year. Interestingly, FM did not mention the fertiliser subsidy at all in his Budget speech.
The Ministry of Chemicals and Fertilisers had demanded an increase of Rs 6,378 crore in fertiliser subsidy due to rise in subsidy expenditure on “account of steep increase in the cost of raw material used in manufacturing fertilisers.”
The sources in the ministry disclosed that the average cost of fertiliser has increased due to rise in naptha and other fuel costs, rise in phospheric acid price from $ 356 per tonne to $ 402 per tonne in recent months.
