The Centre’s fertiliser subsidy is expected to remain within Rs 170,000-180,000 crore due to a fall in global prices and lower imports of urea, amid the raging Red Sea crisis which has led to a rise in freight charges, Minister of Chemicals and Fertilisers Mansukh Mandaviya said on Wednesday.
This would mean the fertiliser subsidy in FY24 will be within the Budget Estimate of Rs 175,100 crore but almost 34 per cent less than the expenditure of FY-23 estimated to be around Rs 256,000 crore.
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The Central government recently cleared an extra subsidy of Rs 13,351 crore under the nutrient-based subsidy scheme through a supplementary demand for grants for FY24.
Mandaviya said the actual subsidy expenditure in FY24 would have been lower had the freight charges not risen due to the Red Sea crisis which has pushed up expenditure of imports.
“The Red Sea crisis has pushed up freight rates by at least three times which has made shipping expensive,” Mandaviya told reporters during the launch of his new book 'Fertilising the Future: Bharat's March Towards Fertiliser Self-Sufficiency'.
He, however, asserted that there is no shortage of fertilisers in the country and the turmoil in the Red Sea has not disrupted imports as the Indian Navy is protecting cargo vessels.
According to exporters, freight rates have skyrocketed by up to 600 per cent due to the crisis, and would hurt world trade. The geopolitical tensions around the Bab-el-Mandeb Strait, a crucial shipping route connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, have escalated due to recent attacks by Yemen-based Houthi militants.
“We have secured supplies of around 7 million tonnes of urea, 2 million tonnes of DAP, 1 million tonnes of MOP, 4 million tonnes of NPK and 2 million tonnes of SSP which is almost a season’s stock of fertilisers in hand,” Mandaviya said. He also said the Centre has managed to bring down the transport subsidy on the domestic movement of fertilisers by almost half to Rs 5,000 crore through its initiative of selling all fertilisers under a single brand name of ‘Bharat’.
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“One nation one fertiliser initiative has enabled us to save almost Rs 5,000 crore annually which was going to the companies for transportation of fertilisers,” Mandaviya said. The minister also said that urea imports are estimated at 4-5 million tonnes this financial year, lower from around 7.5 million tonnes imported in the previous year, helped by higher domestic production and increased use of nano liquid urea.
Book On Covid-19 Vaccine
Health and Fertiliser Minister Mandaviya is working on a book that documents India’s fascinating journey in developing a Covid-19 vaccine and informs how all the arms of the government under the leadership of Prime Minister Narendra Modi worked to ensure supplies of medicines and vaccines domestically and globally during the pandemic. He said the Covid-19 vaccine book will be out in two months.