Cabinet sees tussle over subsidy scheme

The new nutrient-based subsidy (NBS) scheme for fertilisers today saw a tussle between the Congress and its allies in the Cabinet which spilled over into a meeting of the EGoM on prices management. Finance Minister Pranab Mukerjee and Railway Minister Mamata Banerjee exchanged words with Mukherjee actually raising his voice. When Banerjee voiced fears over rising fertiliser prices, FM said: “You want to be populist and refortmist. You are not ready to hike railway fares but are promoting public-private ppp. But when we want to bring major reform in fertiliser prices, you have questions?”

Difference began in the Csbinet meeting in the morning. Fertiliser Minister and DMK MP M K Alagiri initially put his objections to a fertiliser price hike, down in a written note. Agriculture Minister Sharad Pawar, who is also the Nationalist Congress Party (NCP) chief, and National Conference’s Farooq Abdullah, the Union minister for new and renewable energy, also joined the fray and raised apprehensions about a possible rise in fertiliser prices.

Railway Minister and Trinamool Congress chief Mamata Banerjee also asked the government to ensure that the new policy did not lead to a rise in fertiliser prices. “We have to take care of our farmers. We can’t let them down,” she reportedly told the Cabinet.

This did not go dowen well with the Congress anf whenm the EGoM meeting tyook place in the evening, FM ticked Banerjee off in unequivocal terms. Banerjee tried to submit a dissent note at the EGoM meeting so that she could distance herself from the decision.

This was rejected.

After Alagiri, Pawar and Abdullah raised strong objections in the Cabinet, Prime Minister Manmohan Singh sought a broad-based discussion on the issue and asked other ministers to participate.

Most of the Congress ministers like Kapil Sibal, Ghulam Nabi Azad and Virbhadra Singh supported the move.

Finally, Finance Minister Pranab Mukherjee had to re-intervene and assured his colleagues that the government would take care of the interest of farmers and ensured that the prices of fertilisers did not go up. Pawar sought details of the government’s subsidy rates on each of the nutrients. Information and Broadcasting Minister Ambika Soni, however, denied any rift in the Cabinet, but said: “There was an extensive debate and a detailed discussion took place. At the end of the debate, the proposal was approved unanimously.”