Fertiliser subsidy to be hiked? FM calls high-level meeting, say sources

Finance Minister Nirmala Sitharaman on Friday convened a meeting with officials of various departments, including the fertiliser secretary, the petroleum secretary, the agriculture secretary and the expenditure secretary, sources told Zee Business.

According to the sources, discussions in the meeting are likely to include areas such as fertiliser and other agricultural subsidies.

"The fertiliser subsidy may be increased... The availability of fertilisers has declined due to the Iran-Israel-US conflict," said one of the sources.

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Fertiliser prices have seen a spike, said the source.

Fertilisers make a crucial input for agriculture in the country, as they ensure timely availability for farmers while bolstering food security and supporting self-reliance in production. They play a key role in enhancing agricultural productivity. Typically, growth in fertilizer consumption in lined with better crop productivity.

Any improvement in crop productivity helps in sustain food production and rural livelihoods in the country.

Here are answers to a few frequently asked questions (FAQs) on the subject:

What makes fertiliser subsidy crucial in India?

Fertiliser subsidy is a special financial support extended by the central government to keep fertiliser prices under control for farmers in the country. Over the last few years, fertiliser subsidy has been one of the largest components of the country’s agricultural support spending.

This financial support ensures that farmers can buy key nutrients like urea and potash at lower, reasonable rates.

The subsidy is paid by the central government through the Ministry of Chemicals and Fertilisers.

Is this subsidy paid directly to farmers?

No, the subsidy is not paid to farmers. Instead, it is paid to fertiliser manufacturers and importers after they sell fertilisers to farmers at government-fixed prices.

Why does the Centre provide fertiliser subsidy?

This subsidy lets the government address three main things:

• Farmer Income: Fertilisers form a major share of farming costs. Hence, by extending any relief in this area, the government indirectly supports farmers. These subsidies prevent sharp spikes in input costs.
• Food Security: Affordable fertilisers help in maintaining crop productivity, which is crucial for India for several reasons. Crop productivity is an important metric that determines the amount of crop produced per unit of land.
• Prices Stability: Global fertiliser prices can fluctuate sharply for several factors, including changes in gas rates, supply disruptions or geopolitical conflicts.

Does fertilizer subsidy help the agriculture sector?

Yes.

What the current subsidy rates for various nutrients?

The goernment has announced the following Nutrient-Based Subsidy (NBS) rates for the 2025-26 rabi season:

These rates will be effective until March 31.