To ensure supplies of non-urea soil nutrients at a reasonable price to farmers, the Vabinet on Wednesday approved Rs 24,474 crore subsidy on phosphatic and potassic (P&K) fertilisers for the forthcoming rabi season-2024-25.
This represents an 10% increase compared to the previous year, which is low rate of rise compared to recent years, as global prices of the necessary inputs have softened.
“In view of the recent trends in the international prices of fertilizers and inputs — urea, DAP, MOP and sulphur– the government has decided to approve the nutrient based subsidy (NBS) rates for rabi 2024 on P&K fertilizers,” according to an official statement.
It stated that the subsidy would be provided to the fertilizer companies as per approved and notified rates of N (nitrogen), P (phosphorus) and K (potash) so that fertilizers are made available to farmers at affordable prices between October 1, 2024 – March 31, 2025.
The government announces subsidies under the NBS mechanism twice a year before the commencement of kharif and rabi crops sowing. For the kharif 2024 season, the government had approved a subsidy of Rs 24,420 crore for phosphatic and potassic (P&K) fertilisers.
Retail prices of phosphatic and potassic (P&K) fertilisers, including DAP were ‘decontrolled’ in 2010 with the introduction of a ‘fixed-subsidy’ regime as part of NBS mechanism.
The fertiliser subsidy for 2024-25 is projected at Rs 1.64 trillion – Rs 1.19 trillion (urea) and Rs 0.45 trillion (NBS).
Revised estimate for fertiliser subsidy is Rs 1.88 trillion in FY24. In terms of volume, imports account for a third of domestic soil nutrients consumption of around 60 MT annually.
Currently the government is making available 28 grades of P and K fertilizers to farmers at subsidized prices through fertilizer manufacturers and importers.
Since March, 2018, the retail urea price has remained unchanged.The scheme allows retail prices of the key soil nutrient to farmers to be kept at 242 per bag of 45 kg, even as the current cost of production is around Rs 2,600/bag.
