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Q.

Is urea price hike announced essential for the fertilizer industry that is not doing so well at the moment though it can have some political fallout? Your views?

Asked by Good Citizen, 19 Feb '10 01:45 pm
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Answers (1)

1.

If you see this from Govt\'s view point then what they are saying is true : Currently, Indian companies sell fertilisers at a fixed price to farmers and not according to manufacturing cost. The government compensates for the losses by way of subsidies.The annual fertiliser subsidy is estimated at around Rs 70,000 crore in the current financial year and calls for cutting subsidy cost have prompted the government to explore the possibility of de-controlling prices a decision that could have political repercussions. After the decision comes into effect, companies will sell urea at the higher though still fixed price, which translates into the need for fewer subsidies by the government. You said it , that it is more politically motivated since Cutting the fertilizer subsidy was a political challenge for the government as not just farmers but even the Fertiliser Minister, DMKs MK Aligiri, was opposed to the move.While there may not be an immediate impact for fertiliser companies a ...more
Answered by Mohammed asim nehal, 20 Feb '10 03:50 pm

 
  
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