The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the nutrient-based subsidy for Phosphatic and Potassic fertilizers for Indian farmers.
The proposal came from the Department of Fertilizers for the Kharif Season – 2022 i.e. April 1, 2022, to September 30, 2022.
Benefits
The increase in the prices of DAP and its raw material is in the range of approx. 80%.
It will help farmers to receive notified Phosphatic and Potassic fertilizers at subsidized, affordable, and reasonable rates and support the agriculture sector.
The increase in the international prices of Di-ammonium phosphate (DAP) and its raw materials have been primarily absorbed by the Union Government.
The Union Government has decided to provide a subsidy of Rs. 2501 per bag on DAP instead of the existing subsidy of Rs.1650 per bag which is a 50% increase over the last year’s subsidy rates.
Implementation Strategy
The subsidy on Phosphatic and Potassic fertilizers will be provided based on the NBS rates for Kharif season -2022 (applicable from 01.04.2022 to 30.09.2022) to ensure smooth availability of these fertilizers to the farmers at affordable prices.
Financial Implications
Subsidy approved by Cabinet for the NBS Kharif-2022 (from 01.04.2022 to 30.09.2022) will be Rs. 60,939.23 Crores including support for indigenous fertilizer (SSP) through freight subsidy and additional support for indigenous manufacturing and imports of DAP.
Background
The government is making available fertilizers, namely Urea and 25 grades of Phosphatic and Potassic fertilizers to farmers at subsidized prices through fertilizer manufacturers and importers.
The subsidy on Phosphatic and Potassic fertilizers is being governed by NBS Scheme w.e.f 01.04.2010.
In accordance with its farmer-friendly approach, the Govt. is committed to ensuring the availability of Phosphatic and Potassic fertilizers to the farmers at affordable prices.
In view of a steep increase in the international prices of fertilizers and inputs i.e. Urea, DAP, MOP, and Sulphur, Government has decided to absorb the increased prices by increasing subsidies on Phosphatic and Potassic fertilizers including DAP.
The subsidy would be released to fertilizer companies as per approved rates so that they can make available fertilizers to farmers at an affordable price than it would have been otherwise.