The Union Cabinet on Wednesday increased the subsidy for DAP and some other non-urea fertilisers by Rs 14,775 crore to keep the price of crop nutrients low for farmers despite rising costs.
Minister of State for Chemicals and Fertilisers Mansukh Mandaviya on Wednesday said that the Cabinet Committee on Economic Affairs (CCEA) has approved to increase the subsidy amount for DAP fertiliser for the benefit of farmers.
After Urea, Di-Ammonium Phosphate (DAP) fertiliser is the most widely used fertiliser in the country. Last month, the Center had decided to increase the subsidy on DAP fertilisers by 140 per cent. The decision was taken at a high-level meeting chaired by Prime Minister Narendra Modi.
Farmers will get DAP on old rate of Rs 1,200
The Minister said, “Farmers will continue to get DAP at the old rate of Rs 1,200 per bag. The move will help ensure that farmers get access to key soil nutrients at the old rates, despite the jump in global prices.
He said that to give relief to the farmers, the subsidy of DAP fertiliser has been increased from Rs 500 per bag to Rs 1,200 per bag. The minister also said that the additional subsidy burden on the exchequer would be Rs 14,775 crore.
Centre allocates 79,600 budget for fertiliser subsidy in FY22
The government has allocated around Rs 79,600 crore for fertiliser subsidy in the budget for 2021-22. Last year, the actual price of DAP was Rs 1,700 per bag, on which the central government was giving a subsidy of Rs 500. So the companies were selling fertilisers to farmers at Rs 1,200 per bag.
With the rise in global prices, the actual price of the DAP touched Rs 2,400 per bag. To ensure that farmers get DAP at the old rate of Rs 1,200 per bag, the Center has decided to increase the subsidy to Rs 1,200 per bag.
Rs 900 per bag subsidy on Urea
The Minister said that in the case of urea, the MRP (Maximum Retail Price) is fixed while the subsidy amount varies. He said that the government is giving an average subsidy of Rs 900 per bag on urea. However, he added that the government provides a fixed amount of subsidy on non-urea fertilisers, including DAP.
Subsidy rate is fixed for different nutrient-based fertiliser
The Cabinet Committee on Economic Affairs (CCEA) has “approved the proposal of the Department of Fertilisers for fixation of Nutrient Based Subsidy rates for P&K (Phosphatic and Potassic) fertilisers for the year 2021-22.
Now, the subsidy rate for N (Nitrogen) is Rs 18.789, P (Phosphorus) is Rs 45.323, K (Potash) is Rs 10.116 and S (Sulphur) is Rs 2.374. The subsidy is for every kilogram of fertiliser. The rate of NBS on P was Rs 18.78 per kg last year
The government said it has already asked all fertiliser companies to sell their old stock of DAP at the old prices.