The Cabinet today accorded approval to the proposals of the Department of Fertilizers for fixation of NBS rates for the year 2013-14. These rates will be applicable from 1st April 2013.
The Department of Fertilizers is implementing Nutrient Based Subsidy Policy for the P&K fertilizers w.e.f. 1.4.2010. As per this Policy, the Government of India announce NBS rates for various nutrients namely Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S) for P&K fertilizers covered under the policy every year.
Accordingly, the Cabinet has approved per Kg NBS rates of fertilizer nutrients ˜N™, ˜P™, ˜K™ & ˜S` for the financial year 2013-14 at Rs.20.875, Rs.18.679, Rs. 18.333 and Rs.1.677, respectively. Based on these rates, the subsidy on Di-Ammonium Phosphate (DAP) and Muriate of Potash (MOP) would be Rs. 12350 PMT and Rs. 11300 PMT, respectively. The per Metric Tonne subsidy on other P&K fertilizers covered under the Nutrient Based Subsidy Policy shall also be as per the nutrient content in that grade.
Fixation of NBS rates
Under the NBS policy applicable to fertilizers other than Urea, while the government decides a fixed subsidy on each grade of fertilizers covered by the policy, the importers and manufacturers decide the domestic prices of these fertilizers. They are allowed to fix the MRP at reasonable level. As the domestic demand for P&K fertilizers is largely met through import of finished fertilizers and the raw materials, the domestic price should normally move in tandem with movement of prices in the international market. However, in view of the recent trend of falling international prices having no corresponding decrease in domestic prices, the Cabinet has decided that it shall henceforth be mandatory for all fertilizer companies to submit certified cost data while claiming subsidy. In case MRP is not found to be reasonable, subsidy may be restricted or denied. In proven case of abuse of subsidy mechanism, the Government may exclude any grade/grades for fertilizers of a particular company or the fertilizer company itself from the NBS Scheme.
The Cabinet has also decided that the reasonability of MRP of P&K fertilizers fixed by the companies in the year 2012-13 shall also be looked into by the Government for making recovery of subsidy, wherever necessary.
The implementation of new rates will result in reduction of subsidy by about 15%. The price of DAP and MOP is expected to be reduced by a minimum of Rs.1500 and Rs.1000 per MT, respectively from the current level which will provide relief to the farmers.
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