The central government has indicated that it will reduce the total subsidy for fertiliser moderately to Rs 65,971.50 crore in the next fiscal year.

Finance Minister P Chidambaram recommended a small cut in subsidy on crop nutrients from the revised estimate of Rs. 65,974 crore in 2012-13 financial year. Out of the total subsidy, the government will provide Rs 15,544.44 crore for imported urea, Rs 21,000 crore for indigenous (urea) fertiliser and Rs 29,426.86 crore for the sale of decontrolled fertilisers (DAP, MOP and complexes).

The move to reduce the subsidy has been criticised by the Fertiliser Association of India (FAI), which represents the industry players. The industry body claimed that the move to reduce the subsidy would affect payments in payments in 2013-14 even as there is already a huge outstanding amount due for the current financial year till March, 2013.

FAI Director General Satish Chander said, "This amount will not be enough as there are already huge outstanding bills to the tune of about Rs 30,000 crore pending for 2012-13 and if we add to it the real requirement for the next fiscal, then this amount will not do."

Meanwhile, the Fertiliser Ministry has helped arrange for Rs 5,000 crore bank loan for fertiliser companies who have not received subsidy amounts in six months in order to help them manage the lower liquidity problems.