The Centre has slashed the subsidy rates of phosphatic and potassic (P&K) fertlisers for the next fiscal with an estimated outgo of ₹21,274 crore for the year. The revision is in response to a decreasing trend in global prices of finished fertlisers and raw materials, an official release said.
The new subsidy rates were approved by the Cabinet Committee on Economic Affairs (CCEA) during its meeting on Wednesday.
Among the four nutrients in phosphatic and potassic fertilisers, the subsidy rate for nitrogen (N) and phosphorous (P) has been reduced the most — to ₹15.854 per kg and ₹13.241 per kg from ₹20.875 per kg and ₹18.679 per kg respectively.
The subsidy rate for potash (K) was reduced marginally to ₹15.470 per kg from ₹15.50 per kg. For sulphur (S), however, the subsidy rate has been slightly increased to ₹2.044 per kg from ₹1.677 per kg.
“At the same level of consumption of P&K fertilisers (about 310.44 lakh tonnes) during 2016-17 as in 2015-16, the total subsidy implication on P&K fertilisers for 2016-17 at proposed rates works out to be about ₹21,274 crore,” the statement said.
The government has been implementing a nutrient-based subsidy (NBS) policy for decontrolled phosphatic and potassic fertilisers since April 2010. The subsidy on P&K fertilisers is announced annually for each nutrient on a per-kg basis, which is converted into subsidy per tonne depending upon the nutrient content in each grade of the fertilisers.
These rates are determined taking into account the international and domestic prices of P&K fertilisers, the exchange rate and the inventory level in the country.