2-Nov-2022: Cabinet approves Nutrient Based Subsidy rates for Phosphatic and Potassic fertilizers for Rabi season 2022-23 from 1st October, 2022 to 31st March, 2023

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the proposal of the Department of Fertilizers for per Kilogram rates of Nutrient Based Subsidy (NBS) for various Nutrients that is Nitrogen (N), Phosphorus (P), Potash (K) and Sulphur (S) for Phosphatic and Potassic (P&K) fertilizers for Rabi Season – 2022-23 (from 01.10.2022 to 31.03.2023) as below:

Financial Outlay: Subsidy approved by Cabinet for the NBS Rabi-2022 (from 01.10.2022 to 31.03.2023) will be Rs. 51,875 crore including support for indigenous fertilizer (SSP) through freight subsidy.

Benefits: This will enable smooth availability of all P&K fertilizers to the farmers during Rabi 2022-23 at the subsidized / affordable prices of fertilizers and support the agriculture sector.  The volatility in the international prices of fertilizers and raw materials has been primarily absorbed by the Union Government.

Background: Government is making available fertilizers, namely Urea and 25 grades for P&K fertilizers to farmers at subsidized prices through fertilizer manufacturers/importers. The subsidy on P&K fertilizers is being governed by NBS Scheme w.e.f. 01.04.2010. In accordance with its farmer friendly approach, the Govt. is committed to ensure the availability of P&K fertilizers to the farmers at affordable prices. In view of steep increase in the international prices of fertilizers & inputs i.e. Urea, DAP, MOP and Sulphur, Government has decided to absorb the increased prices by increasing subsidy on P&K fertilizers including DAP. The subsidy would be released to fertilizer companies as per approved rates so that they can make fertilizers available to farmers at an affordable price.

27-Apr-2022: Cabinet approves Nutrient Based Subsidy (NBS) rates for Phosphatic and Potassic (P&K) fertilizers for Kharif Season (from 01.04.2022 to 30.09.2022)

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today has approved the proposal of the Department of Fertilizers for Nutrient Based Subsidy (NBS) rates for Phosphatic and Potassic (P&K) fertilizers for Kharif Season - 2022 (from 01.04.2022 to 30.09.2022).

Financial Implications: Subsidy approved by Cabinet for the NBS Kharif-2022 (from 01.04.2022 to 30.09.2022) will be Rs. 60,939.23 Crores including support for indigenous fertilizer (SSP) through freight subsidy and additional support for indigenous manufacturing and imports of DAP.

Benefits: The increase in the international prices of Di-ammonium phosphate (DAP) and its raw materials have been primarily absorbed by the Union Government. The Union Government has decided to provide subsidy of Rs. 2501 per bag on DAP instead of existing subsidy of Rs.1650 per bag which is a 50% increase over the last year’s subsidy rates. The increase in the prices of DAP & its raw material is in the range of approx. 80%. It will help farmers to receive notified P&K fertilizers on subsidized, affordable and reasonable rates and support the agriculture sector.

Implementation Strategy and targets: The subsidy on P&K fertilizers will be provided based on the NBS rates for Kharif season -2022 (applicable from 01.04.2022 to 30.09.2022) to ensure smooth availability of these fertilizers to the farmers at affordable prices.

Background: Government is making available fertilizers, namely Urea and 25 grades of P&K fertilizers to farmers at subsidized prices through fertilizer manufacturers/ importers. The subsidy on P&K fertilizers is being governed by NBS Scheme w.e.f 01.04.2010. In accordance with its farmer friendly approach, the Govt. is committed to ensure the availability of P&K fertilizers to the farmers at affordable prices. In view of steep increase in the international prices of fertilizers & inputs i.e. Urea, DAP, MOP and Sulphur, Government has decided to absorb the increased prices by increasing subsidy on P&K fertilizers including DAP. The subsidy would be released to fertilizer companies as per approved rates so that they can make available fertilizers to farmers at an affordable price than it would have been otherwise.

12-Oct-2021: Cabinet approves Nutrient Based Subsidy (NBS) rates for Phosphatic & Potassic (P&K) Fertilisers for the year 2021-22 (from 1st October, 2021 to 31st March, 2022)

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi has approved the proposal of the Department of Fertilizers for fixation of Nutrient Based Subsidy Rates for P&K Fertilizers for the year 2021-22(from 1st October, 2021 to 31st March, 2022).The approved rates for Nutrient Based Subsidy (NBS)shall be as under:

Per Kg Subsidy rates (in Rs.)

1. Total amount of Rollover will be Rs. 28,602 crore.
2. Special one-time package for additional subsidy on DAP at the tentative additional cost of Rs. 5,716 crore.
3. Special one-time package for additional subsidy on three most consumed NPKs grades viz. NPK 10-26-26, NPK 20-20-0-13 and NPK 12-32-16 at the tentative cost of Rs. 837crore. Total subsidy required will be 35,115 crore.

The CCEA also approved the inclusion of Potash derived from Molasses (0:0:14.5:0) under the NBS Scheme.

Financial Implications: Net subsidy required for Rabi 2021-22 after deducting savings will be Rs.28,655 crore.

Benefits: This will enable smooth availability of all P&K fertilizers to the farmers during Rabi Season 2021-22 at the subsidized  / affordable prices of fertilizers and support the agricultural sector by continuing the present subsidy levels and giving special packages of additional subsidy for DAP and three mostly consumed NPK grades.

It will give Rs. 438 per bag benefit on Di-Ammonium Phosphate (DAP) and Rs. 100 per bag benefit each on NPK 10-26-26, NPK 20-20-0-13 & NPK 12-32-16 so as to maintain prices of these fertilizers affordable to the farmers.

Implementation Strategy and targets: The subsidy on P&K fertilizers will be provided based on the NBS rates approved by the CCEA to ensure smooth availability of these fertilizers to the farmers at affordable prices.

Background: Government is making available fertilizers, namely Urea and 24 grades of P&K fertilizers to farmers at subsidized prices through fertilizer manufacturers/ importers. The subsidy on P&K fertilizers is being governed by NBS Scheme w.e.f. 01.04.2010. ln accordance with its farmer friendly approach, the Govt. is committed to ensure the availability of P&K fertilizers to the farmers at affordable prices. The subsidy would be released to fertilizer companies as per above rates so that they can make available fertilizers to farmers at an affordable price than it would have been otherwise.

27-Jul-2021: Urea is supplied to all farmers at subsidized rates

Urea is provided to the farmers at a statutorily notified Maximum Retail Price (MRP) of Rs.242 per 45 kg bag (exclusive of charges towards neem coating and taxes as applicable). The difference between the delivered cost of urea at farm gate and net market realization by the urea units is given as a subsidy to the urea manufacturer/importer by the Government of India. Therefore, urea is supplied to all farmers at subsidized rates.

The Government has implemented Nutrient Based Subsidy Policy w.e.f. 1.4.2010 for Phosphatic and Potassic (P&K) Fertilizers. Under the policy, a fixed amount of subsidy, decided on an annual basis, is provided on subsidized P&K fertilizers depending on their nutrient content. Under this policy, MRP is fixed by fertilizer companies as per market dynamics at a reasonable level which is monitored by the Government. Accordingly, any farmer who is buying P&K fertilizers at MRP is availing the benefit of subsidy under the NBS scheme irrespective of the state. Subsidy percentage on P&K fertilizers during the year 2020-21 are in the range of 22.49% to 28.97%.

The Government had announced New Investment Policy (NIP) – 2012 on 2nd January, 2013 and its amendment on 7th October, 2014 to facilitate fresh investment in the urea sector, to reduce import dependency and to make the country self-sufficient in the urea sector. Under NIP – 2012 read with its amendment, Matix Fertilizers & Chemicals Limited (Matix) has set up a Coal Bed Methane (CBM) based Greenfield Ammonia –Urea complex at Panagarh, West Bengal. Chambal Fertilizers & Chemicals Limited (CFCL) has also set up a Brownfield project at Gadepan, Rajasthan. In addition to these, 4 closed units namely Ramagundam, Gorakhpur and Sindri of Fertilizer Corporation of India Limited (FCIL) and Barauni unit of Hindustan Fertilizer Corporation Limited (HFCL) also fall under the category of NIP-2012 read with its amendment dated 7thOctober, 2014. Each of these units has an annual production capacity of 12.7 Lakh Metri Tonne (LMT) of Urea per annum. In addition to above, Cabinet in its meeting held on 21.5.2015 has approved to install a new urea plant of 8.646 LMT per annum in the existing premises of Brahmaputra Valley Fertilizers Corporation Ltd (BVFCL) which would replace the existing old urea units Namrup – II and Namrup – III. On operationalisation of these plants, the indigenous urea production would be increased by 72.146 LMT per annum. Further, Talcher Fertilizers Limited (TFL) is setting up a coal gasification based urea unit at Talcher, Odisha. Each of these units have an annual production capacity of 12.7 LMT of Urea per annum.

Further, New Urea Policy (NUP) – 2015 was notified on 25th May, 2015 for existing 25 gas based urea units with the objective of maximizing indigenous urea production; promoting energy efficiency in urea production; and rationalizing subsidy burden on the Government. NUP-2015 has led to the additional production of 20 LMT in 2015-16 as compared to 2014-15. The indigenous urea production for the years 2016-17, 2017-18, 2018-19 was 242.01 LMT, 240.23 LMT and 240 LMT respectively. With the operationalization of CFCL-III in January, 2019, the indigenous production was at the level 246 LMT in the year 2019-20 and 2020-21.

16-Jun-2021: Cabinet approves Nutrient Based Subsidy (NBS) rates for Phosphatic & Potassic (P&K) Fertilisers for the year 2021-22

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi has approved the proposal of the Department of Fertilizers for fixation of Nutrient Based Subsidy Rates for P&K Fertilizers for the year 2021-22(till the present season).The approved rates for NBS effective from the date of notification shall be as under:

Per Kg Subsidy rates (in Rs.)

Government of India is making available fertilizers, namely Urea and 22 grades of P&K fertilizers (including DAP) to farmers at subsidized prices through fertilizer manufacturers/ importers. The subsidy on P&K fertilizers is being governed by NBS Scheme w.e.f. 01.04.2010. In accordance to its farmer friendly approach, the Government is committed to ensure the availability of P&K fertilizers to the farmers at affordable prices. The subsidy is released to fertilizer companies as per NBS rates so that they can make available fertilizers to farmers at affordable price.

In last few months, the international prices of raw materials of DAP and other P&K fertilizers have increased sharply. Prices of finished DAP etc. in international market have also increased. Despite this sharp increase, DAP prices in India were initially not increased by the companies however, some companies increased the DAP price in the beginning of this financial year.

Government is fully sensitive to the concerns of farmers also and is already taking steps to tackle the situation so that farming community can be saved from the effects of this price rise of P&K fertilizers (including DAP). Accordingly, as a first step, Government has already directed all the fertilizers companies to ensure the sufficient availability of these fertilizers in the market for farmers. Availability of fertilizers in the country is being monitored by the Government.

On the pricing front of DAP, Government has already asked all the fertilizer companies to sell their old stocks of DAP etc. at the old prices only. Additionally, it was agreed by the Government that country and its citizens (including farmers) are passing through unprecedented times due to sudden surge in second wave of COVID pandemic. Gol has already announced various special packages considering the hardships faced by the people during the COVID - 19 pandemic. In a similar manner, considering this crisis of pricing of DAP in India as an extraordinary situation & distress for the farmers, Gol has increased the subsidy rates under NBS Scheme as a special package for farmers in such a way that MRP of DAP (including other P&K fertilisers) can be kept at the last year's level till the present Kharif season. This has been done as one-time measure as COVID -19 package to reduce the hardships of farmers. As anticipated that international prices may come down in few months, Gol may review the situation accordingly and decide regarding subsidy rates at that point of time. The estimated additional subsidy burden for such an arrangement will be around Rs 14,775 crore.

15-May-2021: Steps taken to ensure availability of fertilizers to farmers at subsidized prices

Government of India is making available fertilizers, namely Urea and 22 grades of Phosphatic & Potassic (P&K) fertilizers including Di-ammonium Phosphate (DAP), Muriate of Potash (MOP)& Single Superphosphate (SSP) to farmers at subsidized prices through fertilizer manufacturers/ importers. The subsidy on P&K fertilizers is being governed by NBS Scheme w.e.f 01.04.2010.

In accordance to its farmer friendly approach, the Government is committed to ensure the availability of P&K fertilizers to the farmers at affordable prices. The subsidy is released to fertilizer companies as per Nutrient based subsidy rates so that they can make available fertilizers to farmers at affordable price.

In last few months, the international prices of raw materials of DAP and other P&K fertilizers have increased sharply. Prices of finished DAP etc. in international market have also increased proportionately. Despite this sharp increase, DAP prices in India were not increased by the companies till last month. However, some companies have now increased DAP price.

Government of India is fully aware of the situation and it is being closely monitored at very high level in the Government. Government is fully sensitive to the concerns of farmers also and is already taking steps to tackle the situation so that farming community can be saved from the effects of this price rise of P&K fertilizers (including DAP).

As a first step, Government has already directed all the fertilizers companies to ensure the sufficient availability of these fertilizers in the market for farmers. Availability of fertilizers in the country is being daily monitored by the Government.

On the pricing front of DAP, the Government has already asked all the fertilizer companies to sell their old stocks of DAP etc. at the old prices only. Additionally, Government of India is also considering the subsidy rates to offset the rise in international prices of raw materials of P&K Fertilizers and DAP in order to support the farmers cause and lessen the financial burden on them.

In this extraordinary crisis time of the COVID pandemic, the Government is taking all necessary steps to safeguard the interests of farmers.

28-Mar-2018: Cabinet approves continuation of Nutrient Based Subsidy and City Compost Scheme till 2019-20

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi has approved the proposal of the Department of Fertilizers for continuation of Nutrient Based Subsidy (NBS)and City Compost Scheme beyond 12th  Five Year plan till 2019-20.   The total expenditure for continuation of both the schemes till 2019-20 will be Rs. 61,972 crore.

The expenditure for the scheme will be on actual basis since national roll out of DBT entails 100% payment of subsidy to fertilizer companies on sale of fertilizers to farmers at subsidized rates.

The subsidy on the P&K fertilizers and Market Development Assistant (MDA) on City Compost will be provided on the subsidy rates approved by the CCEA on annual basis.

The continuation of the Nutrient Based Subsidy Scheme and City Compost Scheme will ensure that adequate quantity of P&K is made available to the farmers at statutory controlled price.

Background: Government is making available fertilizers, namely Urea and 21 grades of P&K fertilizers to farmers at subsidized prices through fertilizer manufacturers/importers. The subsidy on P&K fertilizers is being governed by NBS Scheme w.e.f 01.04.2010. Similarly, the MDA is being governed by City Compost Scheme w.e.f. 10.02.2016. Accordingly, these schemes have been extended beyond the 12th Five Year Plan till 2019-20.

31-Mar-2017: Cabinet approves the fixation of Nutrient-Based Subsidy (NBS) rates for Phosphatic and Potassic (P&K) fertilizers for the year 2017-18

The Cabinet Committee on Economic Affairs (CCEA) has approved the Fixation of Nutrient Based Subsidy (NBS) rates for Phosphatic and Potassic (P&K) fertilizers for the year 2017-18.

Government has been implementing Nutrient Based Subsidy (NBS) Policy for decontrolled P&K fertilizers. Under this policy, the subsidy on Phosphatic and Potassic (P&K) fertilizers is announced by the Government on annual basis for each nutrient i.e., Nitrogen (N), Phosphorous (P), Potash (K) and Sulphur (S) on per kg basis which is converted into subsidy per tonne depending upon the nutrient content in each grade of the fertilizers. These rates are determined taking into account the international and domestic prices of P&K fertilizers, exchange rate, inventory level in the country etc.

The CCEA in its meeting held on 31st March, 2017 decided to fix the NBS rates for 2017-18. As compared to 2016-17, the subsidy for the period 2017-18 has decreased from Rs. 13.241/kg to 11.997/kg (decrease of Rs. 1.244/kg) for P, from Rs. 15.470/kg to 12.395/kg (decrease of Rs. 3,075/kg) for K whereas the subsidy of N has increased from Rs. 15.854/kg to 18.989/kg (an increase of Rs. 3.135/kg) and of S from Rs. 2.044/kg to 2.240/kg (an increase of Rs. 0.196/kg).

During 2016-17, the estimated consumption of P&K fertilizers is 279.8 LMT. Based on the assumption that the consumption of P&K fertilizers during 2017-18 would remain the same, the estimated subsidy requirement at proposed rates would be Rs. 19,848.99 Crores which is lower than 2016-17 (Rs. 20,688.43 Crores) by Rs. 839.44 crores.

This is in continuation with the reforms being undertaken in the fertilizers sector over the past two and a half years including DBT for subsidy payment, neem coating of Urea, reduction in MRP of P&K fertilizers to promote balanced use of nutrients, removal of minimum production criteria for manufacturers of Single Super Phosphate (SSP).