Panel suggests fertiliser subsidy rate based on March prices

Addressing the National Conference on Agriculture: Kharif Campaign 2022, Chaturvedi said the new NBS rates will be announced soon and will be applicable from April 1.

The IMC, headed by Secretary (Fertilizer), has representatives from the ministries of Finance and Agriculture and NITI Aayog. It recommends NBS rates for nutrients — Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S) — before start of a financial year. The final decision is taken by the Union Cabinet.

Sources said the Ministry of Chemical and Fertilizers has forwarded IMC’s recommendations to the Union Cabinet and these are expected to be approved this week.

Chaturvedi said IMC has recommended revision of NBS rates for kharif 2022 based on average international prices of fertiliser in March “as a special case this year”.

He said international prices of fertiliser and raw materials are rising “constantly” since January 2021.

In the last kharif season, the government had fixed NBS rates of Nitrogen (N) at Rs 18.789 per kg; Phosphate (P) at Rs 45.323 per kg; Potash (K) at Rs 10.116 per kg; and Sulphur (S) at 2.374 per kg. Subsequently, the subsidy on various fertilisers was fixed at Rs 24,231 per metric ton for DAP (18-46-0-0); Rs 6070 for MOP (0-0-60-0); Rs 16,293 per metric ton for NPK (10-26-26-0).

But due to a sharp increase in international price of fertiliser following Russia’s invasion of Ukraine, NBS rates are expected to be fixed at a higher level. This will result in a higher subsidy outgo.

In Union Budget 2022-23, the government has allocated a combined amount of Rs 1.09 lakh crore for fertiliser subsidy — Rs 42,000 crore for P&K fertiliser and Rs 67,187 lakh crore for urea — which is lower than last year’s figure of Rs 1.62 lakh crore. During the current financial year, sources say, the fertiliser subsidy figure is expected to cross Rs 1.75 lakh crore.