Rating agency ICRA has termed the government’s decision to provide a special one-time package for extra subsidy on DAP fertiliser as positive for farmers as well as the industry, and said the availability of key nutrients will improve in the coming months. On Tuesday, the government announced a net subsidy of Rs 28,655 crore on Phosphatic and Potassic (P&K) fertilisers for the October-March period of this fiscal to ensure that farmers get nutrients at affordable prices during the rabi sowing season.
The Cabinet Committee on Economic Affairs (CCEA) has approved the Nutrient-Based Subsidy (NBS) rates for P&K fertilisers for October 2021 to March 2022. In a statement, the rating agency said the Centre has approved a special one-time package for pay-out of additional subsidy for DAP and three most consumed NPK grades.
The subsidy rates under the NBS scheme have been kept unchanged from the announcement made in May 2021. However, an additional pay out of Rs 438/bag (Rs 8,760 per tonne) for DAP and Rs 100 per bag (Rs 2,000 per tonne) for the three most consumed NPK grades has been approved, it added. “The step is positive for the farmers and the industry as it will ensure farmers get access to fertilisers at a reasonable retail price and the industry also does not face losses on account of the elevated international prices of fertilisers and key inputs," ICRA said.