Cabinet approves Rs 3,850-crore package to subsidise phosphate-based fertilisers

A decision in this regard was taken in a meeting of the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Narendra Modi

The government on Wednesday extended additional subsidy on di-ammonium phosphate (DAP) beyond December 31, 2024, to help maintain retail prices of this key fertiliser at Rs 1,350 per bag of 50 kg -- a move that could cost the exchequer up to Rs 3,850 crore.

Last year, the Centre announced a one-time special package on DAP at Rs 3,500 per tonne, valid from April 1, 2024, to December 31, 2024, with a financial implication of Rs 2,625 crore to keep prices under check. The package was over and above the nutrient-based subsidy (NBS) fixed by the government on non-urea nutrients.

On Wednesday, the Union Cabinet -- chaired by Prime Minister Narendra Modi -- approved the proposal for an extension of a one-time special package on DAP at the rate of Rs 3,500 per tonne for the period from January 1, 2025, till further orders.

The decision has been taken to "ensure sustainable availability of DAP at affordable prices to the farmers", an official statement said.

The special package on DAP will be provided over and above the approved NBS (nutrient-based subsidy) to ensure the smooth availability of DAP fertiliser to the farmers at an affordable price.

Briefing media, Information and Broadcasting (I&B) Minister Ashwini Vaishnaw informed that farmers will continue to get DAP at Rs 1,350 per bag and the extra burden will be borne by the central government.

"One-time special package up to Rs 3,850 crore is approved for DAP fertiliser," he added.

He pointed out that the global market prices of DAP are volatile on geopolitical concerns.

The Centre provides 28 grades of P&K (phosphatic and potassic) fertilisers to farmers at subsidised prices through fertiliser manufacturers/importers.

The subsidy on P&K fertilisers is governed by the NBS Scheme, with effect from April 1, 2010.

"Continuing top most priority in keeping farmers' welfare in firm focus, Government of India has extended a massive relief to farmers in keeping the price of Di-Ammonium Phosphate (DAP) fertiliser unchanged," the statement said.

In spite of geopolitical constraints and volatility of global market conditions, the government said it has kept its commitment towards a farmer-friendly approach by ensuring the availability of DAP to farmers at affordable prices for Kharif and Rabi 2024-25.

The Modi government has provided Rs 11.9 lakh crore fertiliser subsidy during the 2014-24 period, which is more than double the subsidy of Rs 5.5 lakh crore for the 2004-14 period.