Fertiliser subsidy may be up slightly in Budget to aid farmers

By Anjana Das

New Delhi, June 21 (IANS) The fertiliser subsidy may be up slightly, by up to Rs 6,000 crore, in the 2019-20 Budget as the government is mulling to provide more funds for both urea and nutrient-based fertilisers.

The total fertiliser subsidy in the interim Budget 2019-20 was pegged at Rs 74,996 crore which may see a minor upward revision by Rs 6,000-Rs 7,000 crore, informed sources said, adding the urea subsidy which stood at Rs 40,000 crore and the nutrient-based subsidy that was Rs 24,832 crore in the interim Budget may both see higher allocations, not exceeding a total of Rs 80,000-Rs 81,000 crore.

The revision would accommodate both payment for import of urea and direct benefit transfer (DBT) among others, they said.

Fertiliser subsidy - one key component of India's subsidy regime towards improving farmers' lot - has been on the upswing in budgets during the NDA regime. In 2017-18, it was Rs 66,468 crore, in 2018-19, it was up to Rs 70,090.35 crore and in the interim Budget, it was set at Rs 74,996 crore.

The government has paid Rs 69,197.96 crore as fertiliser subsidy in 2017-18 and Rs 73,435.21 crore in 2018-19.

Many times to control fiscal deficts, fertiliser subsidies are rolled over to the next financial year. But there is currently a line of thinking in the government to provide this subsidy via DBT. If DBT comes into play, then the roll-over would not be possible, it has to be front-loaded and expenditure will be real-time.

The government bears over Rs 60,000 crore-Rs 70,000 crore annually as fertiliser subsidy to provide cheaper farm nutrients to farmers.

(Anjana Das can be contacted at anjana.d@ians.in)