The Cabinet is likely to take up three schemes on the fertiliser sector on Wednesday, aimed at incentivising lesser use of chemical fertilisers by farmers and reducing subsidy burden of the government.
The Cabinet is likely to approve a new premium product ‘Urea Gold’ or sulphur-coated urea, which will be sold by fertiliser makers at the market determined prices.
The other two schemes the Cabinet is likely to take up include the PM programme for restoration, awareness, nourishment and amelioration of mother earth (PM Pranam) and market assistance programme for the sale of city compost.
Under the PM Pranam, announced by finance minister Nirmala Sitharaman in her Budget speech, the states will be provided financial incentives for reduction in usage of chemical fertilisers through promotion of organic manure, bio-fertilisers, nano- urea and nano-di-ammonium phosphate (DAP).
Based on the state-wise assessment of actual reduction in consumption of chemical soil nutrients through an integrated management system operated by the department of fertilisers, the Centre will provide financial rewards to the state, equivalent to 50% the savings on chemical fertiliser subsidies.
Thee Centre’s annual fertiliser subsidy will be contained below the budget estimate (BE) of Rs 1.75 trillion because of decline in global prices of the relevant commodities, including natural gas and urea. Fertiliser subsidy in FY23 stood at an all-time high of Rs 2.53 trillion, owing to the spike in global commodity prices.
In terms of volume, imports account for a third of domestic soil nutrients consumption of around 65 million tonne annually.