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Pradeep Kumar

20/05/21 12:00 PM IST

Fertiliser subsidy hicked

In news

A historic decision was taken to increase the subsidy for DAP fertiliser from Rs. 500 per bag to Rs. 1200 per bag, which is an increase of 140%.

Highlights 
  • 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.
  • The amount of subsidy per bag has never been increased so much at once.
  • 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.
  • 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.
Reason behind increase in DAP price
  • 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 todays decision, farmers will continue to get a DAP bag for Rs 1200.
Source: PIB

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