Home / News / India /  Cabinet approves additional 14,775 cr for fertiliser subsidies

The Union Cabinet has approved the proposal of the Department of Fertilizers for fixation of 'Nutrient Based Subsidy Rates' for Phosphatic and Potassic (P&K) Fertilizers for the year 2021-22, said Minister of State for Chemicals and Fertilizers Mansukh Mandaviya on Wednesday.

In a press conference along with I&B minister Prakash Javdekar, Mandaviya said the Cabinet has hiked subsidy rates on DAP fertiliser by 700 per bag. Every bag of DAP price at 2,400 now. This would cost an extra 14,775 crore to the exchequer.

Earlier, the Centre slashed the subsidy on non-urea fertilisers, a move that would reduce the burden on the exchequer to 22,186.55 crore in this fiscal amid the COVID-19 outbreak.

The subsidy for nitrogen has been reduced to 18.78 per kg, phosphorous at 14.88 per kg, potash at 10.11 per kg and sulphur at 2.37 per kg for the current financial year, the fertiliser ministry said in a statement.

For 2019-20, the subsidy for nitrogen was fixed at 18.90 per kg, phosphorous at 15.21 per kg, potash at 11.12 per kg and sulphur at 3.56 per kg. And, the expected expenditure was 22,875 crore during 2019-20.

In 2010, the government had launched the nutrient-based subsidy (NBS) programme under which a fixed amount of subsidy, decided on an annual basis, is provided on each grade of subsidised phosphatic and potassic (P&K) fertilisers, except for urea, based on the nutrient content present in them.

Retail prices of non-urea fertilisers such as Di-ammonium Phosphate (DAP), Muriate of Potash (MoP) and NPK are decontrolled and are determined by manufacturers, while Centre gives a fixed subsidy each year.

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