The Union Cabinet, presided over by Prime Minister Narendra Modi, today approved the Department of Fertilizers' proposal for Nutrient Based Subsidy (NBS) rates for Phosphatic and Potassic (P&K) fertilisers for the Kharif Season - 2022. (from 01.04.2022 to 30.09.2022).
Financial Implications:
Cabinet has approved a subsidy of Rs. 60,939.23 crores for the NBS Kharif-2022 (from 01.04.2022 to 30.09.2022), which includes support for indigenous fertilizer (SSP) through freight subsidy and additional support for indigenous manufacturing and DAP imports.
Advantages:
The rise in international prices for di-ammonium phosphate (DAP) and its raw materials has primarily been absorbed by the Union Government. The Union Government has decided to provide a subsidy of Rs. 2501 per bag on DAP instead of the current subsidy of Rs.1650 per bag, representing a 50% increase over the previous year's subsidy rates.
The price of DAP and its raw materials has increased by approximately 80%. It will assist farmers in receiving notified P&K fertilizers at subsidized, affordable, and reasonable rates, thereby supporting the agriculture sector.
Implementation Strategy & Targets:
The subsidy on P&K fertilizers will be provided based on NBS rates for the Kharif season -2022 (applicable from 01.04.2022 to 30.09.2022) to ensure that these fertilizers are available to farmers at reasonable prices.
Through fertilizer manufacturers/importers, the government makes fertilizers, namely urea and 25 grades of P&K fertilizers, available to farmers at subsidized prices.
With effect from April 1, 2010, the subsidy on P&K fertilizers is governed by the NBS Scheme. In keeping with its farmer-friendly approach, the government is committed to making P&K fertilizers available to farmers at reasonable prices.
Because of the sharp increase in international fertilizer and input prices, such as urea, DAP, MOP, and sulphur, the government has decided to absorb the price increases by increasing subsidies on P&K fertilizers, including DAP. The subsidy would be distributed to fertilizer companies at approved rates, allowing them to provide fertilizers to farmers at a lower cost than would otherwise be the case.
