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- The government’s fertilizer subsidy will rise to ₹2.3-2.5 lakh crore in this fiscal but the bill may fall by 25% in the 2023-24 financial year with moderation in global prices, according to industry body FAI.
- Fertilisers Association of India (FAI) expressed concern that the fixed cost of urea has not been increased, affecting the viability of urea plants.
- It also pointed out that the industry is running on a very thin margin, which is hampering new investments in this sector.
- “We estimate the fertilizer subsidy bill at ₹2.3 lakh crore to ₹2.5 lakh crore,” FAI President K.S. Raju told reporters here.
- This has helped insulate the farmers from the impact of a steep increase in the cost of all fertilizers.
- The fertilizer subsidy stood at ₹1.62 lakh crore in the previous financial year.
- FAI board member P. S. Gahlaut, who is MD of Indian Potash Ltd., said the subsidy bill in the next fiscal year could fall by about 25% as global prices had softened.
- FAI said as per the data provided by 24 fertilizer firms, profit after tax as a percentage of turnover were 0.61%, 0.39%, 0.64%, 2.47% and 1.39% for the financial years 2017-18, 2018-19, 2019-20, 2020-21 and 2021-22, respectively.
- “Such wafer-thin margins are grossly inadequate to service the investments made,” the FAI said.
SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB
