Government Hikes Fertiliser Subsidies; To Spend Additional Rs 14,775 Crore

The Union Cupboard on Wednesday raised the subsidies for DAP and another non-urea fertilisers by Rs 14,775 crore to maintain the value of crop vitamins for farmers low regardless of the rising prices. The transfer may also assist in offering reduction to the farmers amid the pandemic.

After urea, Di-Ammonium Phosphate (DAP) fertilizers are essentially the most extensively used one within the nation.

Final month, the Centre determined to extend subsidy on DAP fertilisers by 140 per cent. The choice was taken at a high-level assembly chaired by Prime Minister Narendra Modi.

Briefing the media, Minister of State for Chemical compounds and Fertilisers Mansukh Mandaviya stated on Wednesday that the Cupboard Committee on Financial Affairs (CCEA) has permitted growing the subsidy quantity for DAP fertilisers for the advantages of farmers.

“Farmers will proceed to get DAP on the previous charge of Rs 1,200 per bag,” he stated.

The transfer will assist in guaranteeing that farmers get the important thing soil nutrient on the previous charge regardless of the surge in international costs.

One bag has 50 kilograms of the fertilisers.

In accordance with him, the subsidy for DAP fertilisers has been elevated to Rs 1,200 per bag from Rs 500 per bag to offer reduction to farmers.

The minister additionally stated the extra subsidy burden on the exchequer might be Rs 14,775 crore.

The federal government has allotted practically Rs 79,600 crore for fertiliser subsidies within the 2021-22 Finances.

Final yr, the precise value of DAP was Rs 1,700 per bag, on which the central authorities was giving a subsidy of Rs 500. The businesses have been due to this fact promoting the fertiliser to farmers for Rs 1,200 per bag.

With rise in international costs, the precise value of DAP reached Rs 2,400 per bag. With a view to make sure that the farmers get DAP on the previous charge of Rs 1,200 per bag, the Centre has determined to extend the subsidy to Rs 1,200 per bag.

Mr Mandaviya stated that within the case of urea, the MRP (most retail value) is mounted whereas the subsidy quantity retains altering. On a mean, he stated the federal government is offering Rs 900 per bag subsidy on urea.

Nevertheless, he stated the federal government gives a set quantity of subsidy on non-urea fertilisers, together with DAP.

In accordance with an official assertion, the CCEA has “permitted the proposal of the Division of Fertilisers for fixation of nutrient based mostly subsidy (NBS) charges for P&Okay (phosphatic & potassic) fertilisers for the yr 2021-22 (until the current season)”.

Now, the subsidy charges for N (nitrogen) is Rs 18.789, P (phosphorus) is Rs 45.323, Okay (potash) is Rs 10.116 and S (sulphur) is Rs 2.374. The subsidy is for every kilogram of the fertiliser.

The NBS charge on P stood at Rs 18.78 per kg final yr.

The federal government stated it has already requested all fertiliser corporations to promote their previous shares of DAP on the previous costs solely.

“Moreover, it was agreed by the federal government that nation and its residents (together with farmers) are passing via unprecedented instances on account of sudden surge in second wave of COVID pandemic.

“… contemplating this disaster of pricing of DAP in India as a unprecedented scenario & misery for the farmers, authorities has elevated the subsidy charges underneath NBS Scheme as a particular bundle for farmers in such a approach that MRP of DAP (together with different P&Okay fertilisers) might be stored on the final yr’s stage until the current kharif season,” the assertion stated.

This has been carried out as an one-time measure to cut back the hardships of farmers, it added.

“The estimated extra subsidy burden for such an association might be round Rs 14,775 crore,” the assertion stated.

Stating that worldwide costs are anticipated to come back down in few months, the federal government stated it could overview the scenario and determine on subsidy charges at that time of time.

The centre is making out there fertilisers, specifically urea and 22 grades of P&Okay fertilisers (together with DAP) to farmers at subsidised costs via fertiliser producers/ importers.

The subsidy on P&Okay fertilisers is being ruled by NBS Scheme with impact from April 1, 2010.

“In accordance with its farmer pleasant strategy, the federal government is dedicated to make sure the supply of P&Okay fertilisers to the farmers at inexpensive costs. The subsidy is launched to fertiliser corporations as per NBS charges in order that they’ll make out there fertilisers to farmers at inexpensive value,” the assertion.

In the previous couple of months, the federal government stated that worldwide costs of uncooked supplies of DAP and different P&Okay fertilisers have elevated sharply.

Regardless of this sharp improve, DAP costs in India have been initially not elevated by the businesses. Nevertheless, some corporations elevated the DAP value at first of this monetary yr, the assertion stated.

“The federal government is absolutely delicate to the issues of farmers additionally and is already taking steps to sort out the scenario in order that farming group might be saved from the results of this value rise of P&Okay fertilisers (together with DAP),” the assertion stated.