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 NBS Scheme w.e.f. April 01, 2010.
In accordance to 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, as per Cabinet Committee on Economic Affairs (CCEA).
In 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 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.
Government is fully sensitive to the concerns of farmers also and is already taking steps to tackle the situation so that farming community can be saved from the effects of this price rise of P&K fertilizers (including DAP). Accordingly, as a first step, 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, 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 country and its citizens (including farmers) are passing through unprecedented times due to sudden surge in second wave of COVID pandemic. Gol has already announced various special packages considering the hardships faced by the people during the COVID - 19 pandemic.
In a similar manner, considering this crisis of pricing of DAP in India as an extraordinary situation & distress for the farmers, Gol has increased the subsidy rates under NBS Scheme as a special package for farmers in such a way that MRP of DAP (including other P&K fertilisers) can be kept at the last year's level till the present Kharif season. This has been done as one-time measure as COVID -19 package to reduce the hardships of farmers.
As anticipated that international prices may come down in few months, Gol 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 Rs14,775cr.