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Budget 2024: Government Expected to Maintain Rs 1.64 Lakh Crore Fertiliser Subsidy for FY25

According to a government official speaking anonymously, the upcoming Union budget is likely to maintain the fertiliser subsidy at around Rs 1.64 lakh crore, as projected in the government's interim financial statement. This represents a notable decrease of more than 13% from the previous year's expenditure of Rs 1.89 lakh crore.

The official indicated that the allocation for fertiliser subsidies is expected to remain stable due to reduced urea imports this year, boosted by the adoption of nano urea, and with global input prices anticipated to stay steady.

Furthermore, a blog post from the World Bank's April edition of the Commodity Markets Outlook highlighted that fertiliser input costs have significantly declined from their peak in 2022-23. Looking ahead, prices are forecasted to average lower in 2024 and 2025. However, factors such as China's resumed exports and lower crop prices could potentially drive further decreases in fertiliser prices.


In recent years, India has experienced substantial expenditures on fertiliser subsidies, exceeding Rs 2.5 lakh crore in 2022-23. This increase was primarily driven by volatile global fertiliser prices.

The government is now aiming to reduce fertiliser subsidy allocations by emphasizing initiatives such as nano urea, PM PRANAM (a program encouraging reduced use of chemical fertilisers), and the Department of Fertilisers' market development assistance (MDA) scheme, which promotes composting and alternative fertilisers.

Additionally, the government is targeting a significant reduction of one-third in the urea imports bill to Rs 21,000 crore by FY25, down from Rs 31,000 crore in 2023-24. Furthermore, the government has set a goal to completely eliminate the urea import bill by the end of 2025 through achieving self-sufficiency in urea production. Urea currently makes up 55-60 percent of the total fertiliser consumption in India.

"Our goal is straightforward. By the end of 2025, Prime Minister Narendra Modi intends to eliminate India's reliance on urea imports," stated then fertiliser minister Mansukh Mandaviya in April.

In June 2023, the government announced that by 2025-26, eight nano urea plants would be operational, capable of producing 44 crore bottles, equivalent to 195 lakh tonnes of conventional urea. Liquid nano urea, a nitrogenous fertiliser, is touted for its ability to enhance the efficiency of crop nutrients.

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