Finance Minister Nirmala Sitharaman has lowered the allocation for fertiliser subsidy by 13.2% to ₹1.64 lakh crore for 2024–25 in the interim budget compared to ₹1.89 lakh crore revised budget estimate for FY24. The allocation for fertiliser subsidy for FY24 was budgeted at ₹1.75 lakh crore.
CNBC-TV18 had earlier reported that the government’s fertiliser subsidy for this year is pegged at around ₹1.88 lakh crore, with the government seeking an additional amount of ₹13,350 crore in cash for fertiliser subsidy in early December. Overall, the FM sought Parliament’s approval to spend an additional ₹58,000 crore in cash in FY24 through the Supplementary Demands for Grants during the winter session.
| Fertiliser Subsidy (in ₹ crore) | FY23 | FY24 | FY25 | YoY |
| Urea Subsidy | 1,65,217 | 1,28,594 | 1,19,000 | -7.5 |
| Domestic | 1,25,270 | 1,02,121 | 1,00,340 | -1.7 |
| Imported | 43,407 | 30,000 | 22,634 | -24.6 |
| Nutrient Based Subsidy | 86,122 | 60,300 | 45,000 | -25.4 |
| Domestic | 50,090 | 32,370 | 26,500 | -18.1 |
| Imported | 36,033 | 27,930 | 18,500 | -33.8 |
| Total Fertiliser Subsidy | 2,51,339 | 1,88,894 | 1,64,000 | -13.2 |
The Centre gives subsidy on urea and nutrient-based subsidy on other fertilisers. The drop in subsidy in FY25 is being seen against the backdrop of a drop in international prices, a push for bio- and organic fertilisers and the increased use of nano-urea.
Urea constitutes 55–60% of India's total fertiliser consumption and is met through both imports and local production. A bag of subsidised urea to farmers costs ₹242 per 45-kg bag, excluding taxes and neem coating charges, but the actual cost of the bag is around ₹2,200.
Against the original budget estimate of over ₹1 lakh crore, the government has ended up giving fertiliser subsidies of ₹2.25 lakh crore, amid the ongoing Russia-Ukraine war that impacted global supply chains. Within the overall fertiliser subsidy in FY23, the government has spent ₹63,222 crore on urea and ₹42,000 crore on nutrient-based subsidy.
While input costs softened towards year-end last year, the overall consumption of fertiliser remains high in India, keeping subsidy outgo high.
First Published: Feb 1, 2024 2:28 PM IST
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