This has been done as one-time measure as COVID -19 package to reduce the hardships of farmers. As anticipated that international prices may come down in few months, and the government may review the situation accordingly
NEW DELHI: The Union Cabinet on Wednesday increased subsidy on key fertiliser by 140% to cushion the impact of a surge in global prices of commodities on farmers amid the crucial kharif sowing season.
The government will now offer a subsidy of Rs1,200 a bag of NPK fertiliser compared with the Rs500 being offered so far. “The estimated additional subsidy burden for such an arrangement will be around Rs14,775 crore," an official statement said.
But this is a one-time hike, to remain in effect till the end of the current kharif season.
“This has been done as one-time measure as COVID -19 package to reduce the hardships of farmers. As anticipated that international prices may come down in few months, Gol may review the situation accordingly and decide regarding subsidy rates at that point of time," as per the statement.
A similar hike was announced for diammonium phosphate or DAP fertiliser last month.
"In accordance to its farmer friendly approach, the government is committed to ensure the availability of P&K fertilizers to the farmers at affordable prices. The subsidy is released to fertilizer companies as per NBS rates so that they can make available fertilizers to farmers at affordable price," it said in a statement.
Over the last few months, global prices of raw materials of DAP and other P&K fertilisers have risen sharply. As a result, 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.
On the pricing front of DAP, government has already asked all the fertiliser companies to sell their old stocks of the fertilisers, it added.