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Fertiliser subsidy hike costing exchequer Rs 60,000 crore in lost tax gets thumbs up from Cabinet

Greenlight for about fifty percent hike in subsidy for NPK fertilisers aimed at cushioning the blow from surge in global raw materials prices

April 27, 2022 / 02:34 PM IST

Cabinet on April 27 approved about fifty percent hike in subsidy for NPK fertilisers to cushion the impact from a surge in global raw materials prices, sources said.

Cabinet chaired by prime minister Narendra Modi okayed the proposal to increase the subsidy from Rs 1,650 to Rs 2,500 per bag which will cost the exchequer about Rs 60,000 crore. New subsidy rates will apply from 1 April.

This comes as fertiliser companies have started passing on a portion of rising input costs to farmers with reports saying that fertiliser major IFFCO has raised the price of DAP from Rs 1,200 to Rs 1,350 per 50 kg bag (an increase of 12.5 per cent) while NPKS rate has been raised from Rs 1,290 to Rs 1,400 per 50 kg bag (an increase of 8.5 per cent).

For other grades of NPK fertiliser - NPK-1 and 2 - the price has increased Rs 20 to Rs 1,470 per bag.