29 April 2013 13:18 [Source: ICIS news]
LONDON (ICIS)--The Indian Cabinet Committee on Economic Affairs (CCEA) is expected to meet on 2 May to finalise the much delayed subsidy rates of phosphates and potash fertilizers under the Nutrient-Based Subsidy policy (NBS), according to reports in the national media on Monday.
The subsidy rates will be announced for the current financial year (April 2013-March 2014), and will be implemented retrospectively from 1 April, which is the start of the year.
The subsidy announcement has been delayed for political reasons including the resignation of the fertilizer minister, MK Alagiri, in March. Market participants have not yet ruled out a further delay to the announcement.
Last year, subsidy levels were announced in March.
There are expectations that the subsidy rates of muriate of potash may be reduced by 19%, or Indian rupees (Rs) 2,700/tonne ($50/tonne), to Rs11,740/tonne from Rs14,440/tonne, while diammonium phosphate (DAP) is likely to see a 14%, or Rs2,000/tonne, cut to Rs12,350 from Rs14,350/tonne.
Under the new budget which was announced on 28 February, the total fertilizer subsidy is estimated at Rs659.72bn, largely unchanged from a revised estimate of Rs659.74bn in the previous year.
Under the NBS, retail prices for all non-urea fertilizers were freed but the government reimburses companies the difference in cost of selling these crop nutrients at lower prices to farmers.
($1 = Rs54.38)
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