The Centre on Wednesday cut the subsidy on fertilisers for phosphorus (P), potash (K) and sulphur (S) under the nutrient-based subsidy (NBS) scheme for the rabi season vis-a-vis the kharif season, but hiked it for nitrogen (N).
The total subsidy is estimated at Rs 51,875 crore for the rabi season. The official assistance to fertiliser companies for P has been reduced to Rs 66.93 per kg from Rs 72.74 per kg, K to Rs 23.65 per kg from Rs 25.31 per kg and sulphur to Rs 6.12 per kg from Rs 6.94 per kg. The subsidy for N will be Rs 98.02 per kg during the rabi season, up from Rs 91.96 per kg in the kharif season.
Agriculture expert Devinder Sharma said: “This would increase the input cost of the farmers and would add to the inflationary pressure on the economy. The MSP (minimum support price) announced by the government for the rabi crop was lower than expected and this would further impact the real income of farmers.”
“The volatility in the international prices of fertilisers and raw materials has been primarily absorbed by the Union government,” an official statement said.
The government in April approved a subsidy of Rs 60,939.23 crore for P&K fertilisers for the first six months — kharif season — of the current fiscal year.
Ethanol price
The cabinet on Wednesdayincreased the price of ethanol bought from sugar mills which is used for blending with petrol to Rs 65.61 per litre to help early payment to canefarmers and also to cut reliance on imported crude oil. However, industry said the hike was not attractive enough to drive additional investments in capacity building. The price of ethanol extracted from sugarcane juice was increased to Rs 65.61 per litre from Rs 63.45 per litre for the year starting December 2022.
Sonjoy Mohanty, DG-ISMA said: “The revision of price of ethanol is not enough to drive additional investments in new capacity building.”
“The industry has represented many times to the government that the price of ethanol should be based on return on equity with a payback period of 5 years. The derived price based upon ROE works to Rs 69.85 per litre.”
