Date:24/08/2005 URL: http://www.thehindu.com/2005/08/24/stories/2005082403891600.htm

Business

Crisis-hit SSP units seek higher subsidy

Special Correspondent

Additional SSP produced would only replace imports of DAP

NEW DELHI: The crisis-ridden single super phosphate industry has urged the Government to double the subsidy on this fertilizer product as it would not have a major impact on the current subsidy bill. As against the total annual fertilizer subsidy of Rs. 18,000 crore, the subsidy on SSP is only Rs. 165 crore.

An industry spokesperson pointed out that doubling subsidy to Rs. 330 crore would not have an impact on the subsidy as additional SSP produced would only replace imports of di-ammonium phosphate (DAP).

He pointed out that raising the subsidy on domestic production of SSP would in fact help reduce dependence on imported varieties of fertilizers, including DAP.

The spokesperson told newspersons on Tuesday that the Rs. 900-crore SSP industry had been brought to the verge of a catastrophe, as this fertilizer had not been given the same treatment as other phosphatic fertilizers like DAP.

The increase in costs for DAP and complex fertilizers had been compensated in the form of higher subsidy.

As a result, the subsidy for DAP was nearly Rs. 6,000 a tonne, while the subsidy for SSP remained at Rs. 650 a tonne.

This is despite the fact that SSP played an important role in maintaining soil fertility.

Industry representatives from the Fertiliser Association of India (FAI) said the issue of hiking the SSP subsidy rate might come up for consideration at the next meeting of the Cabinet Committee on Economic Affairs.

They pointed out that unless the subsidy was raised substantially, the SSP industry would face a severe crisis leading to closure of units rendering thousands of people unemployed in rural areas.