The government has decided to continue selling it at the older price of Rs. 1,200 and the central government has decided to bear all the burden of price hike. Last year, the actual price of DAP was Rs. 1,700 per bag in which the central government was giving a subsidy of Rs. 500 per bag so the companies were selling fertilizer to farmers for Rs. 1,200 per bag. 

Recently, the international prices of phosphoric acid, ammonia etc. used in DAP have gone up by 60% to 70%. So the actual price of a DAP bag is now Rs. 2,400 which could be sold by fertilizer companies at Rs. 1,900 after considering a subsidy of Rs. 500. With today's decision, farmers will continue to get a DAP bag for Rs. 1,200. 

The Prime Minister Narendra Modi has remarked that his government is committed to the welfare of farmers and will take all efforts to ensure that farmers do not have to face the brunt of price rise. 

The central government spends about Rs. 80,000 crore on subsidies for chemical fertilisers every year. With the increase in subsidy in DAP, Government of India will spend an additional Rs. 14,775 crore as subsidy in Kharif season. 

This is the second major decision in the farmers’ interest, after directly transferring Rs. 20,667 crore in farmers’ account under PM-KISAN on the day of Akshay Tritiya.