Government to release Rs.220 bn fertiliser subsidy in cash

August 20th, 2008 - 8:55 pm ICT by IANS  

New Delhi, Aug 20 (IANS) The government will soon approve the release of Rs.220 billion as fertiliser subsidy in cash, it was announced here Wednesday.Minister of steel, chemicals and fertilisers Ram Vilas Paswan said the release of this amount - the second tranche - was approved at a meeting chaired by cabinet secretary K.M. Chandrashekhar.

The total subsidy bill to be paid to fertiliser companies this year is Rs.1,150 billion - a sharp rise from Rs.130 billion four years ago.

A government press release said the annual subsidy was calculated following hike in global price of fertilizers and addition of complex fertilisers to the concession scheme.

The second tranche comes in addition to a provision of Rs.320 billion in the Union budget.

According to Paswan, the finance ministry was initially reluctant to release the Rs.220 billion subsidy in cash, but had suggested that it be paid through bonds.

Expressing gratitude to Prime Minister Manmohan Singh, Paswan said Singh personally intervened in the matter as it was related to farmers.

“In the last four years, no burden has been imposed on farmers (due to rising global prices) as there was no increase in prices of fertilizers. We have reduced the prices of complex fertilizers by up to 19 percent,” he added.

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