The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi has approved the proposal of the Department of Fertilizers for fixation of Nutrient Based Subsidy Rates for P&K Fertilizers for FY 2021-22 (till the present season).

The Government of India is making available fertilizers, namely Urea and 22 grades of P&K fertilizers (including DAP) to farmers at subsidized prices through fertilizer manufacturers/ importers. The subsidy on P&K fertilizers is being governed by the NBS Scheme with effect from Ist April, 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 the last few months, the international prices of raw materials of DAP and other P&K fertilizers have increased sharply. Prices of finished DAP etc. in the international market have also increased. Despite this sharp increase, DAP prices in India were initially not increased by the companies; however, some companies increased the DAP price in the beginning of this financial year.

Accordingly, as a first step, the government has already directed all the fertilizers companies to ensure the sufficient availability of these fertilizers in the market for farmers. Availability of fertilizers in the country is being monitored by the government.

On the pricing front of DAP, the government has already asked all the fertilizer companies to sell their old stocks of DAP etc. at the old prices only. Additionally, it was agreed by the government that the country and its citizens (including farmers) are passing through unprecedented times due to the sudden surge in the second wave of COVID pandemic.

As anticipated that international prices may come down in a few months, the Government of India may review the situation accordingly and decide regarding subsidy rates at that point of time. The estimated additional subsidy burden for such an arrangement will be around Rs. 14,775 crore.