The Cabinet Committee on Economic Affairs (CCEA) Union Cabinet chaired
by Prime Minister Shri Narendra Modi has approved the Fixation of
Nutrient Based Subsidy (NBS) rates for Phosphatic and Potassic (P&K)
fertilizers for the year 2017-18.
Government has been implementing Nutrient Based Subsidy (NBS) Policy for
decontrolled P&K fertilizers. Under this policy, the subsidy on
Phosphatic and Potassic (P&K) fertilizers is announced by the Government
on annual basis for each nutrient i.e., Nitrogen (N), Phosphorous (P),
Potash (K) and Sulphur (S) on per kg basis which is converted into
subsidy per tonne depending upon the nutrient content in each grade of
the fertilizers. These rates are determined taking into account the
international and domestic prices of P&K fertilizers, exchange rate,
inventory level in the country etc.
The CCEA in its meeting held on 31st March, 2017 decided to fix the NBS
rates for 2017-18. As compared to 2016-17, the subsidy for the period
2017-18 has decreased from Rs. 13.241/kg to 11.997/kg (decrease of Rs.
1.244/kg) for P, from Rs. 15.470/kg to 12.395/kg (decrease of Rs.
3,075/kg) for K whereas the subsidy of N has increased from Rs.
15.854/kg to 18.989/kg (an increase of Rs. 3.135/kg) and of S from Rs.
2.044/kg to 2.240/kg (an increase of Rs. 0.196/kg).
During 2016-17, the estimated consumption of P&K fertilizers is 279.8
LMT. Based on the assumption that the consumption of P&K fertilizers
during 2017-18 would remain the same, the estimated subsidy requirement
at proposed rates would be Rs. 19,848.99 Crores which is lower than
2016-17 (Rs. 20,688.43 Crores) by Rs. 839.44 crores.
This is in continuation with the reforms being undertaken in the
fertilizers sector over the past two and a half years including DBT for
subsidy payment, neem coating of Urea, reduction in MRP of P&K
fertilizers to promote balanced use of nutrients, removal of minimum
production criteria for manufacturers of Single Super Phosphate (SSP).