Union Budget 2022-23: Reduction in Fertilizer Subsidies Disappoint Farmers

Finance Minister Nirmala Sitharaman on Tuesday unveiled her Fourth Budget 2022-23 with an important point on Fertilizers subsidy. Due to an acute shortage of fertilizers in India, Union Finance Minister Nirmala Sitharaman lowered subsidies on urea and nutrient-based (NPK) fertilizers from February 1, 2022. The decision is anticipated to have a detrimental effect on the ailing farm sector.

Her urea subsidy allotment of Rs 63,222.32 crore in her Budget for 2022-23 was 17% lower than the revised estimates (RE) for 2021-22. Another Rs 42,000 crore was set up to subsidize NPK fertilizers, which was 35% less than the RE.

The government has started cutting back on fertilizer subsidies. In 2020-21, the government spent Rs 127,921.74 crore on fertilizers. The Union budget for 2021-22 reduced it to Rs 79,529.68 crore.

Due to the agrarian crisis, this was raised to Rs 140,122.32 crore. It has been reduced by about 25% in the current budget to Rs 105,222.32 crore.

The reductions come at a time when international record fertilizer prices have hampered the constant supply of fertilizer supplies to Indian farmers. According to an article in the Economic and Political Weekly, the Narendra Modi government has claimed that there is no scarcity in the market, but an assessment of the Integrated Fertilizer Management System (iFMS) data from the Department of Fertilizer, Government of India for October 2021 demonstrates a serious shortage of fertilizer supplies.

Several farmer demonstrations have been recorded around the country as a result of the shortage. Farmers in the Mahoba district of Uttar Pradesh were forced to postpone planting last October due to a fertilizer shortage. Due to the shortage, five farmers in the Bundelkhand region, which covers 13 districts in Uttar Pradesh and Madhya Pradesh, committed suicide. In the approaching Uttar Pradesh elections, ”Subsidies on Fertilizers” is a political issue.