Cabinet approves Rs 51,875 cr subsidy for P&K fertilisers for rabi season

The government on Wednesday approved a subsidy of Rs 51,875 crore for phosphatic and potassic (P&K) fertilisers for the second half of 2022-23 as part of efforts to provide affordable soil nutrients to farmers.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved nutrient-based subsidy (NBS) rates for P&K fertilisers for the 2022-23 rabi season, an official statement said.

The CCEA has approved a subsidy of Rs 98.02 per kg for nitrogen (N), Rs 66.93 per kg for phosphorus (P), Rs 23.65 per kg for potash (K) and Rs 6.12 per kg for sulphur (S), it added.

Briefing media, Fertiliser Minister Mansukh Mandaviya said taking into account the global prices, the subsidy has been increased only for nitrogen for this rabi season, while that for other three nutrients it has been reduced when compared to the NBS subsidy given in the Kharif season this year.

As a result, the total subsidy outgo for P&K fertilisers for six month period of the rabi season from October 2022 to March 2023 is lower at Rs 51,875 crore, when compared to Rs 60,939.23 crore released during the first six months of the Kharif season of the current fiscal.

"However, total fertiliser subsidy, including both P&K and urea fertilisers, will be a record Rs 2.25 lakh crore in the current fiscal, as against Rs 1.65 lakh crore in the previous fiscal," Mandaviya said. During the Kharif season of this year, the subsidy for N was fixed at Rs 91 per kg, P at Rs 72 per kg, K at Rs 25 per kg and S at Rs 6.94 per kg, he added.

Mandaviya explained that the government had to raise the subsidy on P&K fertilisers in the first half of this fiscal in view of high global prices. But for the rabi season, the subsidy was reduced for three nutrients due to the fall in global rates.

"Subsidy approved by the Cabinet for the NBS Rabi-2022 (from 01.10.2022 to 31.03.2023) will be Rs 51,875 crore, including support for indigenous fertiliser (SSP) through freight subsidy," the statement said.
This will enable smooth availability of all P&K fertilisers to farmers during the rabi season at subsidised / affordable prices and support the agriculture sector, it noted.

"The volatility in the international prices of fertilisers and raw materials has been primarily absorbed by the Union government," it added. Mandaviya also said the country will be self-reliant in urea by 2025 with the revival of five urea projects and higher nano-urea production. The dependency on urea imports will be zero by 2025.

One urea plant is already in operation, Ramagundam plant in Telangana will be inaugurated on November 12 by the Prime Minister. Three other plants will be in operation shortly, he said. The Nutrient Based Subsidy (NBS) scheme is being implemented since April 2010.

Under the scheme, a fixed rate of subsidy used to be announced on nutrients, namely nitrogen, phosphate, potash and sulphur by the government on annual basis. However, it is being announced now on a biannual basis.

The per kilogram subsidy rates on N, P, K, and S are converted into per tonne subsidy on the various P&K fertilisers covered under the NBS policy. The government is making available fertilisers to farmers at subsidised prices through fertiliser manufacturers/importers.

Given the steep increase in the international prices of fertilisers and inputs i.E urea, DAP, MOP and sulphur, the government has decided to absorb the increased prices by increasing subsidies on P&K fertilisers, including DAP. The subsidy would be released to fertiliser companies as per approved rates so that they can make fertilisers available to farmers at an affordable price, the statement said.