Govt hikes subsidy on DAP fertiliser by 140 per cent
New Delhi, May 19, 2021
The Government today announced a 140 per cent increase in the subsidy on di-ammonium phosphate (DAP), from Rs 500 to Rs 1,200 per bag, after a high-level meeting on fertiliser prices chaired by Prime Minister Narendra Modi.
An official press release said that the Prime Minister was given a detailed presentation on the issue.
The meeting was told that the price of fertilisers is undergoing an increase due to the rising prices of phosphoric acid, ammonia, and so on international.
Modi stressed that the farmers should get fertilizers at the old rates, despite the rise in international prices.
"A historic decision was taken to increase the subsidy for DAP fertiliser from Rs. 500 per bag to Rs. 1200 per bag, which is an increase of 140%. Thus, despite the rise in international market prices of DAP, it has been decided to continue selling it at the older price of Rs.1,200 and the central government has decided to bear all the burden of price hike. The amount of subsidy per bag has never been increased so much at once," the release said.
Last year, the actual price of DAP was Rs 1,700 per bag, in which the Central Government was giving a subsidy of Rs. 500 per bag. So the companies were selling fertilizer to farmers for Rs 1,200 per bag.
Recently, the international prices of phosphoric acid, ammonia etc. used in DAP have gone up by 60% to 70%. So the actual price of a DAP bag is now Rs 2400, which could be sold by fertilizer companies at Rs 1900 after considering a subsidy of Rs 500. With todays decision, farmers will continue to get a DAP bag for Rs 1,200, the release said.
Modi remarked that his Government is committed to the welfare of farmers and will take all efforts to ensure that farmers do not have to face the brunt of price-rise.
The Central Government spends about Rs 80,000 crore on subsidies for chemical fertilisers every year. With the increase in subsidy in DAP, Government of India will spend an additional Rs 14,775 crore as subsidy in the Kharif season, the release added.