Govt to tweak subsidy policy to promote local production of P&K fertiliser

New Delhi: The government on Saturday decided to make changes to the existing nutrient-based subsidy (NBS) policy to promote domestic production of phosphatic and potassic (P&K) fertilizers amid a sharp rise in global prices.

A decision in this regard was taken in a high-level meeting chaired by Union Minister for Chemicals and Fertilizers Mansukh Mandaviya.

In the meeting, ”…it was decided to continue support to the domestic industry for the production of P&K fertilizers and propose additional provisions in the present NBS Policy to promote domestic production of P&K fertilizers in the country,” an official statement said.

This decision will help in utilizing the unutilized domestic production capacity of these fertilizers and promote ‘Atmanirbhar Bharat’, it added.

Under the NBS policy, being implemented since April 2010, a fixed amount of subsidy which is decided on an annual basis is provided on P&K fertilizers depending on their nutrient content.

Under this policy, the maximum retail price (MRP) of P&K fertilizers is fixed by the fertilizer companies as per the market dynamics at reasonable levels which are monitored by the government.

However, in the current 2020-21 fiscal, the government notified NBS rates for P&K fertilizers twice in order to keep domestic prices of these soil nutrients reasonable to farmers and ensure adequate supply.

Keeping in account high global prices, the Centre has also provided a special one-time package for additional subsidy over above the NBS rates for a period from October 2021 till March 2022 for Diammonium Phosphate (DAP) and the three most consumed NPK fertilizers.

The government has also included potash derived from molasses under the NBS scheme with effect from October 2021. The country imports P&K fertilizers to meet its domestic demand. Global prices of these soil nutrients have increased continuously since early this year.

For instance, global prices of DAP had increased to USD 730 per tonne in September from USD 565 per tonne in May. They have further risen now from that level.