Fertilizer subsidy dues to touch Rs. 45,000 crore by end-March

The Centre had allotted Rs. 72,659 crore towards fertiliser subsidy for FY16

Subsidy dues to the fertilizer industry are likely to touch Rs. 45,000 crore by the end of FY16 owing to insufficient allocation in the Union Budget, lobby group Fertiliser Association of India (FAI) said on Monday.

The Centre had allotted Rs. 72,659 crore towards fertiliser subsidy for FY16. 

However, out of this amount, Rs. 7,000 crore was used to repay bank loans for FY15, leaving Rs. 65,969 crore for this year’s payment to the fertilizer industry.

"Expenditure on account of the subsidy does not reflect in the Budget and manufacturers have to bear an interest burden of nearly Rs. 3,500 crore due to the pending dues," FAI Director Satish Chander said on Monday.

“We get only 25% of our payments from the farmer as 75% of the price of urea is the subsidy amount for which we have to chase the Government every year,” Chander said.

“Budget for subsidy on urea was exhausted in August this year and as of now pending dues to the industry is more than Rs. 30,000 crore,” he added.