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Centre Raises Subsidy on Fertilisers by 140%, Farmers to Continue Buying DAP at Rs 1,200 a Bag

Representative image.

Representative image.

With the increase in subsidy in DAP, the Central government will spend an additional Rs 14,775 crore as subsidy in Kharif season.

In the wake of a steep hike in fertiliser prices, the Centre on Wednesday raised the subsidy on di-ammonium phosphate (DAP) fertiliser by 140%. Farmers will get a subsidy of Rs 1,200 per bag of DAP instead of Rs 500 and would be able to buy a bag of DAP at the old price of Rs 1,200. The government will spend an additional Rs 14,775 crore towards this subsidy. DAP is the most widely consumed fertiliser in India after urea.

The decision was taken at a high level meeting, chaired by Prime Minister Narendra Modi, on fertiliser prices wherein a detailed presentation was made on the issue.

Last year, the actual price of DAP was Rs 1,700 per bag. The Central government was giving a subsidy of Rs 500 for every bag and hence, companies were selling the same to farmers for Rs 1,200.

Recently, the international prices of phosphoric acid, ammonia etc used in DAP have gone up by 60% to 70%. Hence, the actual price of a DAP bag is now Rs 2,400, but the government decision to hike the subsidy will help farmers to continue buying each DAP bag at Rs 1,200.

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Modi said his government is committed to the welfare of farmers and will take all efforts to ensure they do not have to face the brunt of price rise.

The government spends about Rs 80,000 crore on subsidies for chemical fertilisers every year. With the increase in subsidy in DAP, the Centre will spend an additional Rs 14,775 crore as subsidy in Kharif season.

Earlier in the day, the Congress attacked the government over the hike in fertiliser prices, and said this will put an additional burden of Rs 20,000 crore on farmers. Party leader Rahul Gandhi said the government has increased the prices of fertilisers, petrol and diesel, and lowered agri subsidies and income of farmers.

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