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Speed up price reforms to cut fertiliser subsidy: Survey

Alarmed at the mounting fertiliser subsidy at over Rs 140 billion, the pre-Budget Economic Survey on Tuesday asked the government to speed up price reforms for ensuring profitability of this agro-nutrient sector besides better targeting of the subsidies.

"A substantial portion of the fertiliser subsidy actually goes to inefficient high cost of production rather than farmers", the Economic Survey for 2001-2002 presented in Parliament said.

It said fertiliser subsidy has long been an area of concern and different high level committees have recommended possible courses of action.

As announced in the Budget speech of 2001-02, the implementation of the report of the Expenditure Reforms Commission on reform of the retention price system system in fertiliser along with price revisions would help in gradually bringing down subsidy over the next five years, it said.

The existing RPS in fertiliser provides no incentives for improvement in productivity of investment or for energy efficiency in manufacturing plants, it said, adding that accelerated implementation of fertiliser price reform is essential to reduce subsidy to sustainable levels.


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