Farmers can increase subsidy on fertilizers.
The central government may give an additional subsidy of Rs 28,600 crore to fertilizer companies as compensation for selling the product below the market price. The increased subsidy for winter sown crops may be approved earlier this week in a cabinet meeting to be chaired by Prime Minister Narendra Modi. Fixed subsidy on di-ammonium phosphate is now being increased from Rs 1,200 to Rs 1,650 per bag.
There will be no price change for farmers, as the move follows the government’s directive to companies not to increase the retail price of certain fertilisers.
In view of the opposition to agricultural laws, the center can take a decision
The ruling Bharatiya Janata Party is keen to win over farmers after facing heavy opposition over the past year over new laws that allow private businesses to buy agricultural produce directly. Farmers fear that the new rules will replace the government’s guaranteed crop procurement mechanism. His support will be crucial for Modi’s party to win a major state election next year.
The proposal is also partly to offset the rise in international prices of DAP and nitrogen, phosphorus and potassium fertilisers. The increased fertilizer subsidy in the current fiscal will increase spending to Rs 1 lakh crore from Rs 80,000 crore allocated in the federal budget unveiled in February.
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