As announced in the Union Budget 2022, there will be a cut in fertilizer subsidy of about Rs 35,000 crore, which is expected to cause a really huge loss to Punjab. Punjab, which is one of the largest per hectare consumers of fertilizer in the country, is likely to suffer a loss of around Rs 3,141 crore on subsidy and the burden is likely to fall on the farmers.
In the current budget 2022-23 presented on Tuesday, the subsidy amount on fertilizers has been reduced from Rs 1,40,122 crore in the budget of 2021-22 to Rs 1,05,222 crore. This is a reduction of about Rs 34,900 crore (25 per cent).
Punjab – with only 1.53 per cent of the country’s area – is using about 9 per cent of the total fertilizers, including di-ammonium phosphate (DAP), urea, murate of potash (MOP) and super used in India.
It is one of the highest used per hectare. Punjab will suffer a loss of about Rs 3,141 crore, which is 9 per cent of the total deduction of Rs 34,900 crore in subsidy amount.
According to the Indian Express, experts say that if fertilizer rates increase, then this price may also increase and this is possible due to the increasing rates of fertilizers in the international market.
Kaushal Gupta of Nav Durga Traders, a trader of fertilizer in Malsian (Jalandhar) said, “The rate of DAP in the international market has increased manifold and if our company imports it today, it would cost Rs 3,750 per 50 kg. There will be bags and the rate will not come down. In such a situation, when the government is cutting the budget of fertilizer, it means that its MRP will increase and farmers will now have to spend a lot on fertilizer.
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At present, the total subsidy on urea in Punjab is around Rs 16,800 per metric tonne. As a result, farmers were paying Rs 5,911 per metric tonne for urea, i.e. 266.50 paise per 45 kg sack.
The subsidy price is Rs 760 per 45 kg urea bag. Similarly, farmers were paying Rs 1,200 for 50 kg bags of DAP after getting subsidy of Rs 1,650 per bag.
Fertilizer dealers say that due to the elections, the government had increased the subsidy on DAP a few months ago, otherwise this 50 kg sack would have cost the farmers Rs 1,900.
Gupta said, “When the government has reduced the total subsidy budget amount on fertilizers, then of course the farmers need to pay more out of their pocket even if the rate of fertilizers remains the same and if the rate goes up, then it will increase. It will cost them even more.”
Farmer Gurdeep Singh said, “The government is moving towards putting more and more burden on farmers by reducing subsidies and increasing taxes.”
Joint Director Fertilizers (Punjab) Dr. JP S Grewal argued that declaring subsidy on fertilizers meant that Punjab would have to lose a percentage of the subsidy amount as per its total use.
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