Cabinet approves 50% hike in nutrient based subsidy for phosphatic and potassic fertilisers

The cabinet chaired by Prime Minister Narendra Modi approved a subsidy of Rs60,939.23 crore, including support for indigenous fertiliser (SSP) through freight subsidy and additional support for indigenous manufacturing and imports of DAP, for the NBS Kharif-2022 (from 1 April 2022 to 30 September 2022).

The increase in the international prices of Di-ammonium phosphate (DAP) and its raw materials have been primarily absorbed by the union government. It has been decided to provide subsidy of Rs2,501 per bag on DAP instead of existing subsidy of Rs1,650 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 approximately 80 per cent. 

It will help farmers to receive notified P&K fertilizers on subsidised, affordable and reasonable rates and support the agriculture sector.

The subsidy on P&K fertilisers will be provided based on the NBS rates for Kharif season -2022 (applicable from 1 April 2022 to 30 September 2022) to ensure smooth availability of these fertilisers to the farmers at affordable prices.

Government is making available fertilisers, namely, urea and 25 grades of P&K fertilisers to farmers at subsidised prices through fertiliser manufacturers/ importers. The subsidy on P&K fertilisers is being governed by NBS Scheme beginning 1 April 2010. In view of the steep increase in the international prices of fertilisers and inputs, ie, urea, DAP, MOP and sulphur, the government has decided to absorb the increased prices by increasing subsidy 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.