NEW DELHI, JUNE 16, 2021
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, on Wednesday approved the proposal of the Department of Fertilizers for fixation of Nutrient Based Subsidy Rates for Phosphatic & Potassic (P&K) fertilizers for the year 2021-22 (till the present season).
The subsidy rate for Nitrogen has been fixed at Rs 18.789 per Kg., while that for Phosphorus, Potash and Sulphur are Rs 45.323, Rs 10.116 and Rs 2.374, respectively.
Government of India is making available fertilizers, namely Urea and 22 grades of P&K fertilizers (including DAP) to farmers at subsidized prices through fertilizer manufacturers/importers. The subsidy on P&K fertilizers is being governed by NBS Scheme. The subsidy is released to fertilizer companies as per NBS rates so that they can make available fertilizers to farmers at affordable price.
On the pricing front of DAP, Government has already asked all the fertilizer companies to sell their old stocks of DAP etc. at the old prices only.
In last few months, the international prices of raw materials of DAP and other P&K fertilizers have increased sharply. Prices of finished DAP etc. in international market have also increased. Despite this sharp increase, DAP prices in India were initially not increased by the companies however, some companies increased the DAP price in the beginning of this financial year.
As the farmers are going through hard times to due to sudden surge in second wave of COVID pandemic, the Government has increased the subsidy rates under NBS Scheme as a special package for farmers in such a way that MRP of DAP (including other P&K fertilisers) can be kept at the last year’s level till the present Kharif season. This has been done as one-time measure as COVID-19 package to reduce the hardships of farmers.
The estimated additional subsidy burden for such an arrangement will be around Rs 14,775 crore.
As anticipated that international prices may come down in few months, the Government may review the situation accordingly and decide regarding subsidy rates at that point of time.