New Delhi: India said it expects to cut the subsidies on phosphate and potash-based fertilisers by about 15 per cent in the fiscal year that began in April in an effort to rein in the fiscal deficit. In the last fiscal year, the government earmarked Rs 305.76 billion to subsidise phosphate and potash-based fertilisers.
Fertilisers are the third-biggest item in the government's total subsidy bill, amounting to over two per cent of the gross domestic product (GDP), after oil and food.
The final subsidy cuts will depend on total consumption in the current fiscal year, the statement said.
India imports both potash and phosphate. Potash Corp, Mosaic Co, Agrium Inc, Uralkali, Arab Potash Co, and ICL Israel Chemicals are among its major suppliers.
Finance Minister P Chidambaram has estimated the total fertiliser subsidy at Rs 659.72 billion for 2013/14, broadly unchanged from a revised estimate of Rs 659.74 billion in the previous year.
Brakes on public spending helped cut the fiscal deficit to around 5 per cent of GDP this year. India aims to lower that to 4.8 per cent this year.