The fertiliser industry has landed an unexpected pre-Diwali bonanza, with the Finance Minister Nirmala Sitharaman, announcing an additional Rs 65,000 crore subsidy, over and above the Rs 71,309 crore already provided in the Union Budget for 2020-21.
Fertiliser companies were owed around Rs 48,000 crore subsidy dues at the start of the current fiscal. The subsidy requirement for 2020-21 alone – based on the expected consumption of individual fertilisers, cost of imported urea and feedstock (natural gas), rupee-dollar exchange rate, etc – was pegged at Rs 80,000-85,000 crore. The two added up to Rs 128,000-133,000 crore.
Given the subsidy provision of just Rs 71,309 crore, it would have meant a further increase in arrears to Rs 56,000-62,000 crore, to be carried forward to 2021-22. “The Rs 65,000 crore extra allocation announced by the Finance Minister will wipe all outstandings due to the industry. The additional expenditure will be approved as part of the supplementary demands for grants in the upcoming winter session of Parliament or when the revised estimates for this fiscal are placed along with the Budget for 2021-22,” a fertiliser department official told.