The union cabinet chaired by Prime Minister Narendra Modi, today has approved the proposal of the Department of Fertilizers for Nutrient Based Subsidy (NBS) rates for Phosphatic and Potassic (P&K) fertilisers for Kharif Season – 2022 (from 01.04.2022 to 30.09.2022).
Financial Implications
Subsidy approved by the cabinet for the NBS Kharif-2022 (from 01.04.2022 to 30.09.2022) will be Rs. 60,939.23 crore including support for indigenous fertiliser (Single Super Phosphate – SSP) through freight subsidy and additional support for indigenous manufacturing and imports of Diammonium Phosphate (DAP).
Benefits
The increase in the international prices of DAP and its raw materials have been primarily absorbed by the Government of India. The Government has decided to provide a subsidy of Rs. 2,501 per bag on DAP instead of the existing subsidy of Rs.1650 per bag which is a 50 per cent increase over the last year’s subsidy rates. The increase in the prices of DAP and its raw material is in the range of approx. 80 per cent. It will help farmers to receive notified phosphatic and potassic (P&K) fertilisers at subsidised, affordable and reasonable rates and support the agriculture sector.
Implementation strategy and targets
The subsidy on P&K fertilisers 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 fertilisers to the farmers at affordable prices.
Background
The government is making available fertilisers, namely urea and 25 grades of P&K fertilisers to farmers at subsidised prices through fertiliser manufacturers and importers. The subsidy on P&K fertilisers is being governed by NBS scheme w.e.f 01.04.2010. In accordance with its farmer-friendly approach, the government ensures the availability of P&K fertilisers to the farmers at affordable prices. In view of a steep increase in the international prices of fertilisers and their inputs i.e. urea, DAP, Muriate of Potash (MOP) and sulphur, the Government has decided to absorb the increased prices by increasing subsidies on P&K fertilisers including DAP. The subsidy would be released to fertiliser companies as per approved rates so that they can make available fertilisers to farmers at an affordable price than it would have been otherwise.
