News Highlight
Considering the huge increase in the prices of fertilisers in the global market, the Centre has “doubled” the fertilizer subsidy for this rabi season.
Key Takeaway
- The Centre said the nutrient-based subsidy (NBS) rates for phosphatic and potassic (P&K) fertilisers for the Kharif season (April-September, 2022) would be Rs 60,939 crore, as against Rs 57,150 crore for the whole of last year.
- These soil nutrients are largely imported.
- The budget outgo on fertiliser subsidy was at Rs 1.6 trillion in FY22.
- Retail prices of phosphatic and potassic (P&K) fertilisers, including Di-ammonium Phosphate (DAP) were ‘decontrolled’ in 2010 with the introduction of a ‘fixed-subsidy’ regime as part of the Nutrient Based Subsidy (NBS) mechanism.
- However, the subsidy on DAP saw an increase to 60% of the cost in FY22 from a little over 30%.
- According to fertiliser ministry data, imported urea prices have risen by more than 145% to $930 a tonne in April 2022 from $380 a tonne a year ago.
- Similarly, Di-ammonium Phosphate (DAP) and Muriate of potash (MoP) have risen by 66% and 116% to $924 a tonne and $590 a tonne in April 2022, respectively, compared to the year-ago period.
What is a fertiliser subsidy?
- The government launched the Fertiliser Subsidy scheme to provide a subsidy amount to farmers to purchase fertilisers.
- The central government created this scheme to help farmers by cutting the costs of fertilisers.
- The Department of fertilisers implemented Direct Benefit Transfer System on a pilot basis in 2016
- The government introduced the Direct Benefit Transfer (DBT) system in fertilisers in October 2018.
How Does The Fertiliser Subsidy Work?
- The subsidy goes to fertiliser companies, although its ultimate beneficiary is the farmer who pays MRPs less than the market-determined rates.
- In 2018, a Direct benefit transfer (DBT) system was introduced, wherein subsidy payments to the companies would happen only after actual sales to farmers by retailers.
- Each retailer has a point-of-sale (PoS) machine linked to the Department of Fertilisers’ e-Urvarak DBT portal.
- Anybody buying subsidised fertilisers is required to furnish their Aadhaar unique identity or Kisan Credit Card number.
- The quantities of the individual fertilisers purchased, along with the buyer’s name and biometric authentication, have to be captured on the PoS device.
- Only upon the sale getting registered on the e-Urvarak platform can a company claim subsidy, with these being processed every week and payments remitted electronically to its bank account.
Urea-the only regulated Fertiliser.
- Urea is the only fertiliser, with pricing and distribution being controlled statutorily by the Government.
- The Central Govt. pays subsidies on urea to fertiliser manufacturers based on the cost of production at each plant, and the units are required to sell the fertiliser at the government-set Maximum Retail Price (MRP).
Pradhanmantri Bhartiya Janurvarak Pariyojna (PMBJP).
- Under the new “One Nation, One Fertiliser” scheme, companies can display their name, brand, logo, and other relevant product information only on one-third of their bags.
- On the remaining two-thirds of space, the “Bharat” brand and Pradhanmantri Bharatiya Jan Urvarak Pariyojana logo will have to be shown.
- The single brand name for urea, DAP (Diammonium phosphate), MOP (Muriate of Potassium) and NPK, etc. would be Bharat Urea, Bharat DAP, Bharat MOP, and Bharat NPK, etc., respectively, for all fertiliser companies, state trading entities (STEs) and fertiliser marketing entities.
Content Source: The Hindu