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PM Modi's historic step: Subsidy on DAP fertiliser hiked by 140%

The decision was taken after PM Modi chaired a high level meeting on the issue of fertiliser prices.

Devendra Parashar Devendra Parashar @DParashar17
New Delhi Updated on: May 19, 2021 23:49 IST
The government will spend additional Rs 14,775 crore
Image Source : FILE PHOTO/PTI

The government will spend additional Rs 14,775 crore approximately towards this subsidy. 

Underlining that welfare of farmers is at the core of his government's efforts, Prime Minister Narendra Modi on Wednesday took a historic step of hiking fertiliser subsidy by 140%. The decision would mean that farmers will now get subsidy of Rs 1200 per bag of DAP instead of Rs 500. A bag of DAP will cost them Rs 1200 instead of Rs 2400.

The government will spend additional Rs 14,775 crore approximately  towards this subsidy. 

The decision was taken after PM Modi chaired a high level meeting on the issue of fertiliser prices. A detailed presentation was given to him on the issue of fertiliser prices.

ALSO READ: PM-KISAN 8th installment: PM Modi releases Rs 19,000 crore to more than 9.5 crore farmers

It was discussed that the price of fertilisers is undergoing an increase due to the rising prices of phosphoric acid, ammonia etc internationally. PM stressed that farmers should get fertilisers at old rates despite the international rise in prices.

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 fertiliser to farmers for Rs 1200 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 1200.

PM 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 Kharif season.

This is the second major decision in the farmers’ interest, after directly transferring Rs 20,667 crore in Farmers’ account under PM-KISAN on the day of Akshay Tritiya.

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