Fertiliser subsidy unlikely to hit Rs 3 lakh crore, says government official

A ballooning fertiliser subsidy bill is posing fresh fiscal challenges for the government. The bill is a crucial component of the government’s expenses every year and the trend over the last few years has been a bit worrying for a government that is keen on sticking to a fiscal glide path.

During the last three financial years alone, fertiliser subsidy has been clocking a new high every year. From a modest Rs 73,000 crore in 2019, the number jumped nearly 55 percent in two years to Rs 1.33 lakh crore in 2021 and then to a record Rs 1.62 lakh crore last fiscal. For FY23, this number is expected to come in anywhere between Rs 2.25 lakh crore and Rs 2.5 lakh crore.

This is based on the fact that the Department of Fertiliser has asked the Finance Ministry for an additional Rs 1.48 lakh crore, which will mean that the budget nearly doubles from its original size.

Fertiliser secretary Arun Singhal told CNBC-TV18 that the fertiliser subsidy is unlikely to hit Rs 3 lakh crore as raw material prices have started softening a bit.

He added that the government of India is fully committed to ensuring that farmers get all the fertiliser that they require at very reasonable prices.

“Every time we import fertilisers we get it at a different rate. Even for indigenously manufactured fertlisers, the prices of gas, phosphoric acid etc keep on fluctuating, so it is very difficult to give an exact figure as to how much the subsidy is going to be. However, it is going to be above Rs 2 lakh crore. The government of India is fully committed to ensuring that farmers get all the fertiliser that they require at very reasonable prices,” Singhal said.