Fertiliser subsidy for FY 16 is expected to increase to about Rs. 71,000-crore from around Rs. 65,000-crore in FY 15 (at a gas price of about US$6.0 per mBtu), according to a report by India Ratings & Research (Ind-Ra). Increasing subsidies by the government have remained in- sufficient, resulting in a carry forward to next year. FY 15 has not been any different and saw a spill over of the FY 14 subsidy of around Rs. 30,000-crore. The build-up of subsidy dues and a lag in their payments in the second half of every year will continue unless allocations are increased or subsidy obligations are reduced through bold reforms such as decontrolling urea prices and moving the commodity under NBS regime, the report said.
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