Fertiliser subsidies not improving production: Official auditor

August 5th, 2011 - 7:19 pm ICT by IANS  

New Delhi, Aug 5 (IANS) Despite the government footing high bills on account of subsidising fertilisers, the official auditor said domestic production levels in ten years ending 2008-09 had increased only marginally and the country was increasingly relying on imports to meet its fertiliser requirements.

In a performance audit of fertiliser subsidy released Friday, the Comptroller and Auditor General said, “despite the huge amount of subsidy, increasing from Rs.11,387 crore in 1998-99 to Rs.96,603 crore in 2008-09, the production of fertilisers has increased only marginally.”

Production of fertilisers rose from 269 lakh tonnes in 1998-99 to 298 lakh tonnes in 2008-09, while consumption rose from 317 lakh tonnes in 1998-99 to 468 lakh tonnes in 2008-09.

“Changes in the subsidy regimen have failed to incentivise increase in domestic production of fertiliser,” the CAG report said.

India has had as many as 11 different subsidy regimes in the fertiliser sector starting 1957.

The latest, nutrient-based subsidy scheme, was operationalised in April 2010. The CAG’s performance audit covered the subsidy schemes and process from 2003-04 to 2008-09.

The auditor also said that increased consumption of fertilisers was being largely met through imports.

“This leaves the country dependent on imports whose pricing is volatile,” said the CAG adding that concession on imported fertilisers from 1998-99 to 2008-09 had increased from 3 percent to 47 percent of the total subsidy.

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