Notification on enhancing subsidy rates for DAP and other P & K fertilisers for upcoming Kharif season issued today

Following the historic announcement by the Prime Minister Shri Narendra Modi on enhancing the subsidy for fertilizers, the notification on this was issued today.

The Central Government will provide a total of Rs.14,775 crore more subsidy in the Kharif season 21. In which Rs.9,125 Crore additional subsidy for DAP and Rs.5,650 Crore additional subsidy for NPK based complex fertiliser, will be spent.

Now the subsidy on P&K fertilizers including DAP have been increased more than 100% till Kharif season 21. With the additional amount of Rs 14,775 crore in Kharif season 21 towards this subsidy, the existing subsidy load which was Rs.27,500 Crores in 2020-21 will now be Rs. 42,275 Crores during the current financial year.

Subsidy of DAP fertilizer has been increased from Rs.500 per bag to Rs.1200 per bag, which is an increase of around 140%. Thus, despite the rise in international market prices of DAP, it has been decided to continue selling it at the older price of Rs.1200 per bag and the Central Government has decided to bear all the burden of price hike on this account. The amount of subsidy per bag has never been increased so much at once.

Government is making available fertilizers, namely Urea and P&K fertilizers (including DAP, MOP & SSP) to farmers at subsidized prices through fertilizer manufacturers/importers. The subsidy on P&K fertilizers is being governed by NBS Scheme w.e.f 01.04.2010.

In accordance with its farmer friendly approach, the Government is committed to ensure the availability of P&K fertilizers to the farmers at affordable prices. The subsidy is released to fertilizer companies as per NBS rates so that they can make available fertilizers to farmers at affordable price.

In last few months, the international prices of raw materials of DAP and other P&K fertilizers increased sharply. Prices of finished DAP etc. in the international market have also increased proportionately. So the actual price of a DAP bag increased to Rs.2400, which was being sold by Fertilizer companies at Rs.1900 after considering the subsidy of Rs.500 per bag.

The Government is taking all efforts to ensure that farmers do not have to face the brunt of price-rise. As per PM’s directions, the Government of India has decided to support farmers on this issue.

The Central Government spends about Rs.80,000 Crore on subsidies for chemical fertilisers every year. With the increase in subsidy in DAP and other subsidized P&K fertilizers, it has been decided to provide an additional Rs.14,775 crore as subsidy in Kharif season 21.

The Notification to this effect has been issued by DoF today. The product-wise subsidy (applicable from 20.05.2021 till 31.10.2021) on various grades of P&K fertilizers covered under NBS Policy shall be as under: –

 

Companies have been directed to comply with the reasonableness of MRP of P&K fertilizers and shall submit the certified cost data as per the reasonableness guidelines dated 15.11.2019.  The companies shall also report MRPs of P&K fertilizers regularly to DoF.  The profit earned above the reasonable profit shall be treated as unreasonable and shall be recovered from the subsidy bills of the defaulting companies.

P&K fertilizers will not be sold at the higher MRP (as per the old subsidy rates) from the date of this notification.  If any instance of selling the P&K fertilizer at the higher MRP comes into knowledge of the DoF, strict action will be taken against the defaulting company.  It shall be the duty of the companies to ensure that henceforth their retailers sell the P&K fertilizer at the MRP commensurate with this notified subsidy rates.

Union Minister Shri D V Sadananda Gowda has directed the department of Fertilizers to closely monitor the availability, supply and prices of the Fertilizers to farmers, in close coordination with State Governments.

 Click here to read the notification :

https://www.pib.gov.in/PressReleasePage.aspx?PRID=1720200