The Government approved a grant of Rs 60,939.23 crore for phosphatic and potassic fertilisers and bought DAP for the first six months of the CET exercise and farmer nutrition effort at an unreasonable price. The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the proposed nutrient-based subsidy rate (NBS) for phosphate-potassium (P&K) fertilizers for the kharif season, which runs from April 1 to September 30, according to an official statement. "The Cabinet-approved subsidy for NBS Kharif-2022 will be Rs 60,939.23 crore, including support for domestic fertilizers (SSP) through transport subsidies and additional support for domestic manufacturing and import of DAP," he added.
The increase in international prices for diammonium phosphate (FDA) and its raw materials has been largely absorbed by the Union government. "The Union Government has decided to provide a subsidy of Rs.2,501 per bag in DAP instead of the existing subsidy of Rs.1,650 per bag, which represents a 50 percent increase over last year's subsidy rates," the press release said. In a press conference, Information and Broadcasting Minister Anurag Thakur said the cabinet had approved a Rs.60,939 million subsidy for P&K fertilizers for the first six months of 2022-23, up from around Rs.57,150 million subsidy for these nutrients for the full year last fiscal year. He said the DAP subsidy had been increased to Rs.2,501 per bag and farmers would continue to receive DAP at Rs.1,350 per bag. The total cost of a DAP bag is Rs 3,851.
The DAP subsidy has been increased five times from Rs 512 per bag in 2020-2021 to Rs 2,501 per bag, he said, adding that DAP prices in India are lower than neighbouring countries and even the US and Brazil. The minister noted that despite the sharp rise in fertilizer prices on world markets, the government has ensured that the burden on farmers does not increase. "The farmers will not be charged."
"As far as farmers are concerned, we occasionally made a profit. The cost of raw materials, transportation costs and other components have risen sharply, which has led to an overall increase in the price of fertilizers. P&K." he said. In a tweet, Mansukh Mandaviya, Minister of Chemicals and Fertilizers, said the landmark subsidy decision will benefit farmers, not burden them. According to the press release, the price increase for DAP and its raw material is around 80%. "(A higher subsidy) will help farmers obtain reported P&K fertilizers at subsidized, affordable and reasonable prices and support the agricultural sector," she added.
Fertilizers, namely Class 25 urea and P&K fertilizers, are made available to farmers by the government at subsidized prices through fertilizer manufacturers/importers. “Faced with the sharp increase in international prices for fertilizers and inputs, namely urea, DAP, MOP and sulphur, the government has decided to offset the price increase by increasing subsidies for P&K fertilizers, including DAP. The subsidy would be provided to fertilizer companies at approved rates to enable them to make fertilizer available to farmers at an affordable price that it otherwise would have been," the statement said.
Under the NBS, implemented since April 2010, the government announces a fixed subsidy rate (in Rs per kg) for nutrients, namely nitrogen (N), phosphate (P), potassium (K) and sulphur (S). on an annual basis. The subsidy rates per kg for the nutrients N, P, K and S are converted into the subsidy per tonne of the various P&K fertilizers covered by the NBS. For urea, the center sets the maximum selling price and reimburses the difference between the maximum selling price and the cost of production in the form of a subsidy.
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