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No freight reimbursement on secondary movement of P&K fertilizers: Govt

04 Apr 2012 Evaluate

The subsidy given by the government on the secondary movement of phospatic and potassic (P&K) fertilizers has been scrapped. However the government has decided to provide additional subsidies to hilly states like those located in the North East because of the difficult terrain.

The government has been providing subsidies for transportation of fertilizers, as per three components. The first is the movement of fertilisers from port or plant by rail to various collection points and is termed as 'primary movement'. The costs involved are reimbursed to the companies based on the railway receipts.

The second is the transportation of fertilisers from the railway rake points to the district headquarters; and the third is on direct road movement. The second component estimated to be around Rs 300 per tonne has been scrapped by the government with effect from April 1, 2012.

The government will continue to provide freight subsidy on direct road movement of P&K fertilisers from plant or port to the district headquarters (except single super phosphate) as per the actual distance subject to a maximum distance of 500 km. The distance of 500 km has been fixed for the direct road movement by the government to ensure no loss of business to railways in terms of fertiliser movement.

Additional freight subsidy for Jammu & Kashmir, Sikkim, Uttarakhand, Himachal Pradesh, Andaman & Nicobar and the 7 North-Eastern will be provided because most companies are reluctant to move fertilisers there owing to the difficult terrain and high transportation cost. The subsidy is expected to act as incentive to boost transportation.

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