``The industry is being made a scape goat between political compulsion of not increasing the selling price and the financial compulsion of not increasing the subsidy despite the industry having no control over rising costs,'' the apex association of the fertiliser industry said in a statement here.

FAI said the Rs 4,400 per tonne concession on indigeneous DAP and government fixed price of Rs 8,300 per tonne does not even cover the break-even cost of the manufacturer.

According to the industry's calculations, the subsidy should have been hiked to Rs 5,000 per tonne for indigeneous DAP to save the sector from losses

The association said it was unfortunate to announce the subsidy three months after the season was over, that too at a ratesignificantly below the reasonable cost of production.

The government had on Wednesday (December 27) announced a 10 per cent subsidy increase on indigeneous DAP and 35 per cent on imported DAP as the industry was constantly demanding a hike keeping in view the rupee devaluation and increased costs of raw materials.

The FAI said it was paradoxical that after having decontrolled these products, government still controls arbitrarily both the consumer prices as well as the rate of concession, the sum of which does not add up to reasonable cost of production and distribution, and then blames the industry for shortages.

``The government also finds ways of throttling the industry by not releasing the payments even at the announced rates,'' FAI said. Such a reduction in concession (subsidy), ignoring the rise in cost of raw materials like imported ammonia and phospheric acid was bound to erode confidence of industry in government assurances, the association said.