In a bid to ensure the soil nutrient is available to farmers at old rates despite a sharp rise in global prices, the Centre, in a historic pro-farmer decision, has hiked the subsidy on DAP fertiliser by 140 per cent, costing the exchequer an additional Rs 14,775 crore. After urea, Di-ammonium Phosphate (DAP) is the most widely used fertiliser in the country.
Despite the rise in international market prices of DAP, it has been decided to continue selling it at the old price of Rs 1,200 per bag. The central government has decided to bear all the burden of price hike. The amount of subsidy per bag has never been increased so much at once.
The government spends about Rs 80,000 crore on subsidies for chemical fertilisers every year. With the increase in subsidy for DAP, the government will spend an additional Rs 14,775 crore as subsidy in the Kharif season of this year.