Govt is seeking nod for Rs 6500 crore extra Fertiliser Subsidy in FY08. The Fertiliser Stocks are up in falling markets due to this news.

The government today sought Parliament approval for Rs 15000 crore extra spending on fertiliser subsidy in the current financial year ending March. The government has sought approval for additional expenditure of Rs 3500 crore for providing subsidy on imported urea, Rs 5000 crore for subsidy on indigenous urea and Rs 6500 crore for subsidy on imported decontrolled fertilisers.

Of the extra Rs 15000 crore, the net cash outgo for the government will be Rs 6550 crore. The remaining will be met through bonds worth Rs 7500 crore to fertiliser companies and internal savings of Rs 950 crore. The government sought the approval for the additional spend on fertilisers through the first batch of supplementary demand for grants placed in the Rajya Sabha.

A senior government official said the fertiliser department had sought additional Rs 17200 crore for meeting the subsidy expenditure for the current financial year.

He said the department was planning to ask for another Rs 8100 crore in the next batch of supplementary demand for grants, as the fertiliser subsidy is likely to more than double from the budget estimates.

Fertiliser Minister Ramvilas Paswan had last month said the government's fertiliser subsidy bill is likely to increase to Rs 50284 crore in 2007-08 (Apr-Mar), up from the budgeted allocation of Rs 22451 crore, due to higher carryover from last year, increased consumption and rising input costs