NEW DELHI: The Union Cabinet on June 16 approved a ₹700 per bag hike in subsidy for Di-ammonium Phosphate (DAP) fertiliser and the increase will result in an additional cost of ₹14,775 crore to the exchequer.
The hike is part of the government’s effort to ensure that farmers gets the key soil nutrient at old rates despite rise in global prices.
After urea, DAP fertiliser is the most widely one in the country.
Last month, the Centre decided to increase subsidy on DAP fertiliser by 140%. The decision was taken at a high-level meeting chaired by Prime Minister Narendra Modi.
Briefing the media, Minister of State for Chemicals and Fertilisers Mansukh Mandaviya on June 16 said the Cabinet has approved increasing the subsidy amount for DAP fertiliser for the benefits of farmers.
“Farmers will continue to get DAP at the old rate of ₹1,200 per bag,” he said.
One bag has 50 kilograms of the fertiliser.
According to him, the subsidy for DAP fertiliser has been increased to ₹1,200 per bag from ₹500 per bag to provide relief to farmers.
The Minister also said the additional subsidy burden on the exchequer will be ₹14,775 crore.
Last year, the actual price of DAP was ₹1,700 per bag, on which the central government was giving a subsidy of ₹500. The companies were therefore selling the fertiliser to farmers for ₹1,200 per bag.
With rise in global prices, the actual price of DAP reached ₹2,400 per bag. In order to ensure that the farmers get DAP at the old rate of ₹1,200 per bag, the Centre has decided to increase the subsidy to ₹1,200 per bag.
Mr. Mandaviya said that in the case of urea, the MRP (Maximum Retail Price) is fixed while the subsidy amount keeps changing. On an average, he said the government is providing ₹900 per bag subsidy on urea.
However, he said the government provides a fixed amount of subsidy on non-urea fertilisers, including DAP. (AGENCY)
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