New Delhi—India’s government has reduced the subsidy allocation on phosphate and potash fertilizers by 13 percent, to Rs190 billion ($2.77 billion) for the 2016/17 fertilizer year, starting April 1, but it has raised the allocation for urea by 1 percent, to Rs510 billion. The total fertilizer subsidy allocation for 2016/17 is Rs700 billion, down from an estimated Rs724 billion for 2015/16. For phosphate and potash fertilizers, Rs120 billion is allocated for indigenously-produced product and Rs70 billion for imported phosphate and potash fertilizers. The final subsidies on DAP, potash, and NPK are expected to be announced later this month. Out of the total allocation for urea, Rs400 billion has been earmarked for domestically-produced product and Rs110 billion for imported urea. FAI Director General Satish Chander has said the fertilizer subsidy allocation is sufficient to meet requirements for 2016/17 if international prices for urea, DAP, and potash remain at current low levels, but would not cover outstanding subsidies arrears from past years, which he put at Rs450 billion. India’s Finance Minister Arun Jaitley on Feb.29 also announced the government will introduce a direct benefit transfer (DBT) of fertilizer subsidy to farmers on a pilot basis in a few districts of the country, with the aim of improving quality of service delivery to farmers. It is thought the new scheme also will bring financial benefits to India’s fertilizer producers. India already has introduced a DBT on LPG. India Farmers Fertiliser Cooperative Ltd. (IFFCO) welcomed the government’s move, and said it will go a long way to improving the financial and operational sentiments of the ailing domestic fertilizer industry, local media reported.
Transparency Across the Fertilizer Value-Chain