It was only two years back; the annual subsidy bill of the Government of India touched an all-time high level of about Rs.1 lakh crore which posed serious fiscal concerns. The high subsidy amount was caused by high imports at high international prices of finished fertilisers. The amount of subsidy on imported fertilisers alone was about Rs.42, 677 crore in 2008-09, which was a hefty 44 per cent of the total subsidy bill. In fact, Government continues to pay higher subsidy per tonne on imported urea compared to indigenously manufactured gas based urea. As a result of reduction in international prices subsequently, the amount of subsidy has reduced in the following years.
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