Phalguna Jandhyala

New Delhi, Jan. 14

The Department of Fertilisers (DoF) has sought Rs 50,000 crore from the Finance Ministry when it finalises the Budget Estimates for the 2008-09 fiscal for paying out the fertiliser subsidies.

Sources told Business Line that the DoF has recently written to the Finance Ministry stating that the total subsidy for 2008-09 fiscal is likely to touch Rs 60,000 crore. As per the revised estimates the total fertiliser subsidy for the currently financial year has been estimated to be Rs 45,000 crore.

“As per our understanding the Finance Ministry has allocated around Rs 31,000 crore for fertiliser subsidies in the original Budget Estimates. But we have sought the amount to be increased to around Rs 50,000 crore as the cost of importing raw materials and fertilisers has seen a sharp increase in the last couple of months,” the source said. According to estimates, the cost of sulphur has gone up from $80 per tonne to $529 per tonne in the last six to eight months.

While currently the international price of phosphoric acid currently is around $1,400 and the cost of di-ammonium phosphate in the international market is around $600 per tonne.

The official also said that even if the Finance Ministry sanctions another Rs 4,000 crore in the last supplementary, it would still leave an additional requirement of Rs 4,000 crore to even out the carryover from the fiscal.

“If we go by the estimates of the Finance Ministry then the net availability for the industry will be only around 27,000 crore. This would leave a huge shortfall in subsidies and concessions. It is also very difficult for the Finance Ministry to allocate huge sums when the supplementary demand for grants is placed in Parliament, so that is why we have requested them to give a bigger allocation in the Budget itself,” he said.

The Finance Minister, Mr P. Chidambaram, in the 2007-08 Budget had allocated Rs 22,450 crore for the payment of the subsidies.

Subsequently, Rs 14,050 crore was sanctioned in the first supplementary demand for grants.

There was, however, no provision in the second supplement.

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