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Government Cuts Subsidy on Non-Urea Fertilizers; Rs 22,187 Crore will be Given for FY 2020-21

The Centre has cut the subsidy on non-urea fertilisers, to reduce the burden on the exchequer to Rs 22,186.55 crore for FY21 during the COVID-19 lockdown. This decision was taken in the meeting of the Cabinet Committee on Economic Affairs (CCEA) which was headed by PM Narendra Modi.

Tooba Maher

The Centre has cut the subsidy on non-urea fertilisers, to reduce the burden on the exchequer to Rs 22,186.55 crore for FY21 during the COVID-19 lockdown. This decision was taken in the meeting of the Cabinet Committee on Economic Affairs (CCEA) which was headed by PM Narendra Modi.

Prakash Javadekar, Minister of Information & Broadcasting said, “The CCEA has given its approval for fixation of nutrient-based subsidy (NBS) rates for phosphatic & potassic (P&K) fertilisers for the year 2020-21. The expected expenditure for release of subsidy on P&K fertilisers during 2020-21 will be Rs 22,186.55 crore.”

The fertiliser ministry has said in a statement, the nitrogen subsidy has been reduced to Rs 18.78 per kg, phosphorous Rs 14.88 per kg, potash Rs 10.11 per kg & sulphur Rs 2.37 per kg for the present financial year.

For 2019-20, the subsidy for nitrogen was fixed at Rs 18.90 per kg, phosphorous at Rs 15.21 per kg, potash at Rs 11.12 per kg & sulphur at Rs 3.56 per kg. The expected expenditure was Rs 22,875 crore in year 2019-20.

Adding to it, the CCEA has also approved the inclusion of a complex fertiliser called ammonium phosphate (NP 14:28:0:0) under the NBS scheme. In the year 2010, the government has started the nutrient-based subsidy (NBS) programme. Under it, a fixed amount of subsidy, decided on an annual basis, is given on each grade of subsidised phosphatic & potassic (P&K) fertilisers, except for urea, based on the nutrient content present in them.

The retail prices of non-urea fertilisers like Di-ammonium Phosphate (DAP), Muriate of Potash (MoP) and NPK are decontrolled. They are determined by manufacturers, while Centre provides a fixed subsidy each year.

The government is also making available fertilisers, such as urea & 21 grades of P&K fertilisers to farmers at subsidised prices via manufacturers or importers. For urea, the MRP (maximum retail price) are fixed by the government. The difference between the production cost & the MRP is reimbursed to manufacturers.

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