Cabinet Approves Rs 28655 Crore Subsidy on P&K Fertilizers for Rabi Season

The government announced a net subsidy of Rs.28655 crore on phosphatic and potassium (P&K) fertilizers on Tuesday to guarantee that farmers have access to nutrients at reasonable costs throughout the rabi sowing season.

The Nutrient Based Subsidy (NBS) rates for P&K fertilizers have been authorized by the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, for the period of October 2021 to March 2022. In October, the Rabi (winter-sown) season begins.

According to an official statement, the per kg subsidy rates for N (nitrogen), P (phosphorus), K (potash), and S (sulphur) have been established under the NBS at Rs.18.789, Rs.45.323, Rs.10.116, and Rs.2.374, respectively.

According to the government, the "overall amount of rollover will be Rs.28602 crore." It has also granted a special one-time package for increased DAP subsidy at a preliminary cost of Rs.5716 crore.

At a cost of Rs.837 crore, a unique one-time package for extra subsidy on three highly used NPK grades, namely NPK 10-26-26, NPK 20-20-0-13, and NPK 12-32-16, has been supplied.

According to the statement, the total subsidy required will be Rs.35115 crore. The CCEA also approved to include molasses-derived potash (0:0:14.5:0) in the NBS Scheme.

"After subtracting savings, the net subsidy required for Rabi 2021-22 will be Rs.28655 crore," according to the statement.

In June, the CCEA increased DAP and other non-urea fertiliser subsidies by Rs.14775 crore.

In the 2021-22 Budget, the government budgeted around Rs.79600 crore for fertilizer subsidies, and the figures might grow if extra subsidies are provided.

The government stated on Tuesday that the extra subsidy will ensure that all P&K fertilizers are available to farmers at subsidized/affordable costs during Rabi Season 2021-22.

The Centre is assisting farmers and the agricultural industry by maintaining current subsidy levels and providing special packages of extra subsidies for DAP and three commonly used NPK grades.

"It would offer Rs.438 per bag benefit on Di-Ammonium Phosphate (DAP) and Rs.100 per bag benefit on NPK 10-26-26, NPK 20-20-0-13, and NPK 1 2-32-16 to keep fertilizer costs reasonable to farmers," the release added.

In June, the government boosted the DAP subsidy by 140% to Rs.1200 per bag (of 50 kg each) to guarantee that farmers continue to have access to this vital fertilizer at a reasonable price, notwithstanding the surge in worldwide prices.

Farmers can obtain subsidized fertilizers, such as urea and 24 kinds of P&K fertilizer, from the government through manufacturers/importers.

With effect from April 2010, the NBS Scheme governs the subsidy on P&K fertilizers.

In the case of urea, the Centre has established maximum retail pricing and reimburses the difference between MRP and production cost through subsidy.