Saturday, August 1, 2009

Most subsidized sector?

Businessline has this excellent graphic which neatly summarizes the story of fertilizer sector in India.

It shows that for every Rs 100 of sales that domestic fertiliser companies clocked in 2008-09, no less than Rs 60 came from taxpayers’ money! The government's policy of administering the prices of fertilizers and keeping it unchanged since 2003 has meant that the revenues realised by fertilizer companies as subsidy has outstripped what was grossed from regular sales. Only about 20% of cost is recovered for many of the fertilizers. In 2008-09, fertiliser companies received a record Rs 99,494.71 crore in subsidies, most of which was provided in the form of fertilizer bonds.

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