Govt increases rabi season fertilizer subsidy to ₹24,475 crore

The Union Cabinet has approved ₹24,474.53 crore subsidy on phospatic and potassic (P&K) fertilizers for the current Rabi season, as against ₹22,303 crore allocated in 2023 Rabi season due to hike in global prices in recent days.

According to the decision, the subsidy for nitrogen (N) will be ₹43.02/kg in Rabi season 2024 starting October, down from ₹47.02/kg in the previous Rabi season and sulphur (S) has been fixed at ₹1.76/kg, lower from ₹1.89/kg year-ago, official sources said. There is no change in potash (K) subsidy which will remain at ₹2.38/kg, sources said.

However, there is a big jump in subsidy of phosphorus (P) to ₹30.80/kg from ₹20.82/kg, up by 49 per cent. Phosphorus is a key nutrient in DAP (di-ammonium phosphate), the key nutrient for wheat and mustard, both rabi season’s crops. The government has reportedly fixed the maximum retail price of ₹1,350 per 50 kg bag of DAP and has been tweaking the subsidy according to global price movement since India depends mostly on imports.

The government statement has not mentioned the exact rate of subsidy for each nutrient. The decision is aimed at ensuring the availability of fertilisers to farmers at subsidised, affordable and reasonable prices, an official statement said.

Fertilizer subsidy has reached ₹45,242.01 crore, with urea accounting for ₹32,461.52 crore and P and K ₹12,759.32 crore during April-July period. This is about 28 per cent of ₹1,64,000 crore budgeted for the current fiscal, even as there is 30 per cent drop in overall import of key chemical fertilizers.

Price of imported urea increased by nearly 26 per cent to $354/tonne (FOB) in July, from $282/tonne year-ago and that of Di-ammonium Phosphate (DAP) surged 30 per cent to $572/tonne (CFR) in July from $440/tonne year-ago. The imported MoP price was $290/tonne against $ 422/tonne.

The fertilizer ministry data showed that DAP imports declined 44.9 per cent to 14.66 lakh tonnes (lt) during April-July from 26.59 lt a year-ago and urea imports dropped 31.7 per cent to 10.15 lt from 14.87 lt. The import of MoP too fell by 24.2 per cent to 7.32 lt from 9.66 lt.

PM-AASHA outlay at ₹35,000 cr

Meanwhile, the Cabinet has also approved continuation of the pulses and oilseeds procurement scheme named PM-AASHA, with an outlay of ₹35,000 crore. “The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the continuation of schemes of Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) to provide remunerative prices to farmers and to control price volatility of essential commodities for consumers,” an official statement said.

The total financial outgo will be ₹35,000 crore during the 15th Finance Commission Cycle up to March 31, 2026, it added.

“The integrated scheme of PM-AASHA will bring in more effectiveness in the implementation, which would not only help in providing remunerative prices to the farmers for their produce, but also control the price volatility of essential commodities by ensuring their availability at affordable prices to consumers,” the government said.

The Price Stabilisation Fund (PSF) scheme has been converged under PM-AASHA to serve the farmers and consumers more efficiently, it said. Earlier, PM-AASHA had three components — Price Support Scheme (PSS), Price Deficit Payment Scheme (PDPS) and Market Intervention Scheme (MIS).

Under the PSS, the Centre buys notified pulses, oilseeds and copra at their respective MSP maximum 25 per cent of the production, though it is extended up to 40 per cent in case of exigency. However, in recent years this ceiling has been waived off in case of tur, urad and masur and the government has continued the same policy (no capping) for 2024-25 season.

The purchases of oilseeds and pulses at MSPs will be undertaken by the National Agricultural Cooperative Marketing Federation of India (NAFED) through its eSamridhi portal and by National Cooperative Consumers’ Federation of India (NCCF) through eSamyukti portal from pre-registered farmers and through procurement centres in mandis as well.

The government also clarified that for the PSF scheme, the procurement of pulses at market price (not MSP) will be done by the Department of Consumer Affairs whenever the prices rule above MSP, for maintaining a buffer stock.