India Plans Pricing Policy for Additional Fertilizer Capacity

Agriculture, which accounts for about a fifth of the economy, isestimated to have grown at a slower pace of 2.6 percent in the yearended March 31, compared with a 3.8 percent pace in the previousfinancial year.

The government has said it wants to increase growth in agricultureto an average annual pace of at least 4 percent. To achieve thatgrowth, India needs to increase production of fertilizers amongstother measures.

The government fixes the price at which fertilizer is sold tofarmers, pays companies the difference between the costs andselling price and guarantees a post-tax return.
The average subsidy on a ton of urea is 14,080 rupees, or about 74percent of the total cost, the ministry of chemicals andfertilizers said in a statement today.