Centre extends additional subsidy on DAP, costing up to Rs 3,850 crore

Chouhan says NCEL enters into agreement with Indonesia to supply 1 million tonnes of non-basmati white rice

To preclude the possibility of a retail price increase, the Centre on Wednesday extended the additional subsidy on di-ammonium phosphate (DAP) beyond December 31, 2024 — a move that will enable fertiliser companies to maintain the current price levels at Rs 1,350 per 50-kg bag.

 

The extension will impose on the exchequer an additional burden of up to Rs 3,850 crore.

 

Sources said in the absence of the extension, fertiliser companies were planning to increase DAP rates by at least Rs 200 per bag to compensate for the under-recoveries due to the increased cost of imports.

 

DAP is the most consumed fertiliser in the country after urea.

 

That apart, the government extended two flagship crop insurance schemes — Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS) — for one more year till 2025-26 and also created a separate Rs 824.77 crore fund for technology infusion in the implementation of the flagship schemes.

 

The fund will be used to provide digital assistance to the crop-insurance schemes. The PMFBY and RWBCIS have been extended to align them with the 15th Finance Commission period.

 

Meanwhile, on DAP subsidy, last year, the Centre announced a one-time special package for DAP at Rs 3,500 per tonne, valid from April 1, 2024, to December 31, 2024, with a financial implication of Rs 2,625 crore. This was to keep prices in check.

 

The package was over and above the nutrient-based subsidy (NBS) fixed by the government on non-urea nutrients in the Budget. 

 

It was announced to cover the extra expenditure that companies incurred on importing finished DAP or its raw material, whose cost had gone up due to longer transportation routes on account of geopolitical tensions.

 

The extension of the extra subsidy beyond December 31, 2024, also means the subsidy on non-urea fertiliser in FY25 could exceed the Budget Estimates of Rs 45,000 crore.

 

The data shows till November 2024, expenditure on subsidies for non-urea fertilisers had touched 83 per cent of the Budget Estimates.

 

Meanwhile, experts said despite the extension of the additional subsidy on DAP beyond December 2024, per bag under-recovery in retailing DAP at Rs 1,350 will still be around Rs 40. This is assuming the landed price of imported DAP to be around $640 per tonne. 

 

The government said the actual price of DAP is around Rs 2433 per bag which means as of now it still gives a subsidy of Rs 1043.

 

India imports around half its annual DAP requirements of around 11 million tonnes while the raw materials for making them domestically are almost entirely imported.

Govt okays 1 mt non-basmati rice export to Indonesia through NCEL: Chouhan   Agriculture Minister Shivraj Singh Chouhan on Wednesday said the National Cooperative Exports Ltd (NCEL), which is cooperative registered under Multi-State Cooperatives Act and promoted by four other bodies, has entered into an agreement to export 1 million tonnes (mt) of non-basmati white rice to Indonesia. Chouhan who was addressing reporters on the eve of New Year said the Centre will work according to the Supreme Court guidelines regarding the ongoing farmers’s agitation on Punjab-Haryana borders. On demand of the protesting farmers for a meeting with him, Chouhan said he is always willing to meet farmers. Chouhan also chaired a review meeting of the rural development ministry, where he ordered quick allocation of 1 million new houses under the Pradhan Mantri Awas Yojana.