Shares of nine fertiliser companies rose by 1.67% to 6.62% after the government on Wednesday increased its share of subsidy for di-ammonia phosphate (DAP) fertiliser by 140% from Rs 500 to Rs 1,200 per bag.
National Fertilizers (up 6.62%), Rashtriya Chemicals & Fertilizers (up 5.81%), Fertilizers & Chemicals Travancore (up 5.61%), Deepak Fertilisers & Petrochemicals (up 4.88%), Coromandel International (up 3.65%), Gujarat State Fertilizers & Chemicals (up 3.52%), Chambal Fertilisers & Chemicals (up 3.14%) and GNFC (up 1.67%) advanced.The government has decided to increase the subsidy for DAP fertiliser from Rs. 500 per bag to Rs. 1200 per bag, which is an increase of 140%. Thus, despite the rise in international market prices of DAP, it has been decided to continue selling it at the older price of Rs 1200 and the central government has decided to bear all the burden of price hike.
Last year, the actual price of DAP was Rs 1,700 per bag. In which the Central Government was giving a subsidy of Rs 500 per bag. So the companies were selling fertilizer to farmers for Rs 1200 per bag.
Recently, the international prices of phosphoric acid, ammonia etc. used in DAP have gone up by 60% to 70%. So the actual price of a DAP bag is now Rs 2400, which could be sold by fertilizer companies at Rs 1900 after considering a subsidy of Rs 500. With the latest decision, farmers will continue to get a DAP bag for Rs 1200.
The central government spends about Rs 80,000 crore on subsidies for chemical fertilisers every year. With the increase in subsidy in DAP, Government of India will spend an additional Rs 14,775 crore as subsidy in Kharif season.
This is the second major decision in the farmers' interest, after directly transferring Rs. 20,667 crore in Farmers' account under PM-KISAN on the day of Akshay Tritiya.
Powered by Capital Market - Live News
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU