Govt reduces subsidy on non-Urea fertilizers

The government has announced a reduction in the subsidy on non-Urea fertilizers which will cut expenditure to exchequer marginally
Govt reduces subsidy on non-Urea fertilizers
  • The move will bring down the subsidy burden on the government marginally from Rs 22,875 crore in 2019-20 to Rs 22,186.55 crore in this financial year

  • The CCEA also approved the inclusion of a complex fertilizer namely ammonium phosphate (NP 14:28:0:0) under the NBS scheme

New Delhi: The government has announced a reduction in the subsidy on non-Urea fertilizers on Wednesday. The move will bring down the subsidy burden on the government marginally from Rs 22,875 crore in 2019-20 to Rs 22,186.55 crore in this financial year. A decision on the matter was taken at the meeting of the CCEA (Cabinet Committee on Economic Affairs) headed by Prime Minister Narendra Modi.

The decision comes at a time when the country is under a lockdown to prevent the spread of Coronavirus and economic activity has come to a standstill. Businesses across sectors have been waiting for the government to announce relief packages.

'Expenditure for release of subsidy on fertilisers will be Rs 22,186.55 cr'

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

New subsidies

The subsidy for nitrogen has been reduced to Rs 18.78 per kg, phosphorous at Rs 14.88 per kg, potash at Rs 10.11 per kg and sulphur at Rs 2.37 per kg for financial year 2020-21, the fertiliser ministry said in a statement.

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 and sulphur at Rs 3.56 per kg. And, the expected expenditure was Rs 22,875 crore during 2019-20.

CCEA approves inclusion of a complex fertilizer under NBS scheme

The CCEA also approved the inclusion of a complex fertilizer namely ammonium phosphate (NP 14:28:0:0) under the NBS (nutrient-based subsidy) scheme.

In 2010, the government had launched NBS scheme under which a fixed amount of subsidy, decided on an annual basis, is provided on each grade of subsidised phosphatic and potassic (P&K) fertilizers, except for Urea, based on the nutrient content present in them.

Retail prices of non-urea fertilisers such as Di-ammonium Phosphate (DAP), Muriate of Potash (MoP) and NPK are decontrolled and are determined by manufacturers, while Centre gives a fixed subsidy each year.

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