According to Kelkar Committee Report the fertilizer subsidy bill for FY 2012-13 is expected to increase by Rs 10,000 crore in respect of the budgeted estimates. The Government has to take reform action immediately to curb this increase in subsidy bill. In current financial year FY 2012-13 the subsidy bill would reach to Rs 70,974 crore while it was estimated as Rs 60,974 crore in the budget.
The Kelkar Committee also said that subsidy bill for current year FY 2012-13 can be reduce to Rs 60,974 crore if government implement the required reforms in fertilizer sector. The committee has also called for decrease in two other major subsidies – petro-products subsidy and food subsidies. It has proposed Rs 20,000-crore and Rs 10,000 crore reduction reduction respectively.
The Kelkar Committee also observes that the government planned to contain subsidy within 2% of the GDP in FY 2012-13 but due to international conditions like depreciating Rupee and oil prices subsidies are projected to rise to 2.6 % of GDP.
After discussions with the Ministry of Petroleum and Natural Gas and Department of Fertilizers, the Kelkar Committee has proposed certain initiatives to whittle down subsidies to 2 per cent in FY 2013-14 and 1.8 % in FY 2014-15.
Stay tuned to Fertilizer News Blog for more news on fertilizer subsidy bill !