The Centre on Thursday said it has fixed subsidy on potash derived from molasses (PDM) for the first time under the Nutrient Based Subsidy, a move expected to reduce the country's dependence on mineral-based potash.

The government will offer a subsidy of Rs 73 per 50 kg bag of PDM sold at Rs 600-800 by fertiliser companies to farmers, it said.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, cleared the proposal in its recent meeting.

According to the Fertilizer Ministry, "It is expected that the Union Government will spend Rs 156 crore (approx.) annually as a subsidy on PDM and save foreign exchange of Rs 562 crores".

This will give a push to sugar mills to manufacture the byproduct 'molasses', from which potash can be derived. This will boost the revenue of mills and income of sugarcane growers, the ministry said in a statement.

Besides, it is expected to reduce India's dependence on 100 per cent import of more than 42 lakh tonnes of mineral-based Muriate of Potash (MOP), which costs around Rs 7,160 crore annually, the statement said.

Till last year, the government was fixing the subsidy under the Nutrient Based Subsidy (NBS) scheme for 22 varieties of fertilisers having soil nutrients namely Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S).

However, in May this year, two complex fertilisers were included under the NBS. The inclusion of PDM takes the total variants of fertiliser to 25.

The government has also extended the increase in the subsidy of phosphatic (P) and potassic (K) fertiliser from October 1 till March 31 of this financial year, while enhanced subsidy on Diammonium phosphate (DAP) by Rs 438 per bag as a special one-time package.

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