Ukraine crisis: Commodity prices to impact FY23 fertiliser subsidy targets

The Reserve Bank of India projects the retail inflation rate to average 4.5 per cent in FY23

As Russia’s invasion of Ukraine keeps global commodity markets on tenterhooks, at least one allocation in the FY23 Budget is likely to be exceeded, the government has assessed, even before 2022-23 has begun.

The FY23 fertiliser subsidy allocation of Rs 1.05 trillion is looking insufficient owing to a continuing spike in urea rates and the expectation that other key raw materials like phosphate and ammonia might further come under pressure due rising crude oil and gas prices.

“Our fertiliser subsidy will go up,” a top government official said.

The Budget Estimate for the FY23 fertiliser subsidy is almost 25 per cent less than