The authorities on Wednesday stated the Nutrient Based Subsidy (NBS) charges for phosphatic and potassic (P&Okay) fertilisers for the Kharif season (April-September, 2022) might be Rs 60,939 crore, as in opposition to Rs 57,150 crore for the entire of final 12 months. The enhance in subsidy is supposed to insulate farmers from the will increase within the costs of di-ammonium phosphate (DAP) and different non-urea vitamins within the world markets. These soil vitamins are largely imported.
Last 12 months’s NBS subsidy included Rs 28,495 crore for the Kharif and Rs 28,655 crore for the Rabi season.
In 2020-21 too, the federal government needed to hike the NBS subsidy steeply given the surge in imported fertiliser costs.
Increase in NBS charges for Kharif season, coupled with an anticipated rise in urea subsidy because of the elevated costs of each urea and LNG within the world markets might increase India’s fertiliser subsidy bills in 2022-23 to over Rs 2.2 trillion in FY23, analysts say.
Budgeted fertiliser subsidy was at Rs 1.6 trillion in 2021-22.
Retail costs of phosphatic and potassic (P&Okay) fertilisers, together with DAP have been ‘decontrolled’ in 2010 with the introduction of a ‘fixed-subsidy’ regime as a part of NBS mechanism. However, the subsidy on DAP noticed a rise to 60% of price in FY22, from a bit of over 30% beforehand.
However, the costs have continued to rise within the world markets even after the subsidy hike. As a outcome, from a stage of Rs 18,000/tonne in November, the retail value of MoP has risen to the present stage of Rs 32,000/tonne. Similarly, the DAP now prices Rs 27,000/tonne to Indian farmers as in opposition to Rs 24,000/tonne in November final 12 months.
New NBS charges might be relevant from April 1, 2022. In 2021-22, authorities had twice revised NBS charges for phosphatic fertilisers.
The cupboard committee on financial affairs (CCEA) has permitted a proposal of fertiliser ministry by offering subsidy of Rs 2,501 per bag (50 kg) on DAP for kharif 2022 as in opposition to present subsidy of Rs 1,650 per bag.
It implies the farmers would get DAP on the Rs 1,350 per bag, whereas the precise price is Rs 3,851 per bag. The subsidy assist offered by the federal government is for indigenous fertilizer (SSP) by freight subsidy and extra assist for indigenous manufacturing and imports of DAP.
“Increase in the international prices of DAP and its raw materials have been primarily absorbed by the Union Government,” an official assertion stated. The assertion famous that the rise within the costs of DAP & its uncooked materials within the final one 12 months is round 80%.
An inter-ministerial committee just lately really helpful revision of nutrient-based subsidy charges for vitamins comparable to nitrogen, phosphorus, potassium and sulphur for kharif 2022 based mostly on common world costs of fertilizers in March 2022.
According to the ministry information, imported urea costs have risen by greater than 145% to $930 a tonne in April 2022 from $380 a tonne a 12 months in the past. Similarly, costs of DAP and MoP have risen by 66% and 116% to $924 a tonne and $590 a tonne in April 2022, respectively, in comparison with the year-ago interval.
It could be the third 12 months in a row in 2022-23 that the annual Budget spending on fertiliser subsidy might be a lot above the Rs 1-trillion mark, in opposition to a decrease vary of about Rs 70,000-80,000 crore prior to now few years.
The official stated that the futures costs of imported fertiliser might rely upon the Russia-Ukraine battle, which has disrupted the provides of DAP and MoP.
However, fertilizer ministry officers have acknowledged that there is not going to be any fertilizer scarcity within the upcoming kharif sowing season. “In case the Ukraine-Russia conflict persists, there could be a shortage of fertiliser in the rabi sowing season,” an official stated.
According to official estimates, in opposition to fertiliser requirement of 35.43 million tonne (MT) through the 2022 kharif season, availability could be 48.55 MT, together with 10.47 MT of imported fertiliser and 25.47 MT of domestically produced soil vitamins.
In the case of urea, farmers pay a set value of Rs 242 per bag (45 kg) which covers about 20% of the price of manufacturing, the steadiness is offered by the federal government as subsidy to fertiliser items.
India meets about 75-80% of the amount of consumption of urea from home manufacturing whereas the remaining is imported from Oman, Egypt, the UAE, South African and Ukraine.
Nearly half of its DAP necessities are imported by way of (primarily from West Asia and Jordan) whereas the home MoP demand is met solely by imports (from Belarus, Canada and Jordan, and so forth).
Source: www.financialexpress.com”