Higher cost of production due to the elevated cost of gas could increase the subsidy outgo on fertilisers during 2023-24 as would the extension of the free foodgrain scheme beyond December 2023 Fertiliser subsidy outgo during 2022-23 is estimated to be around Rs 2.25 lakh crore against a budget estimate (BE) of Rs 1.05 lakh crore. In the Budget for 2023-24, finance minister Nirmala Sitharaman informed that the government was set to achieve the fiscal deficit target of 6.4 percent of the gross domestic product (GDP) for the financial year 2022-23. This was despite substantial slippages in the expenditure on fertilisers and food subsidies. Fertiliser subsidy outgo during 2022-23 is estimated to be around Rs 2.25 lakh crore against a budget...
More
Comments are closed
Category: Moneycontrol.com
Budget 2023 needs to play the hard ball on fertiliser subsidy
In a business-as-usual scenario, there won’t be any respite from a high fertiliser subsidy. Things could change if the Modi government plays the hard ball in Budget 2023 by going for measures such as urea decontrol and direct benefit transfer (DBT) or a significant increase in maximum retail price Fertiliser subsidy is payments made to manufacturers or importers to cover the excess of the cost of production/import and distribution. Propelled by the need to return to a fiscal consolidation path, the Union government is keen to rein in major subsidies. It wants to slash fertiliser subsidies from the likely actual of around Rs 2.50 lakh crore during the current fiscal year (FY) to Rs 1.40-1.50 lakh crore during FY2024. Going...
More
Comments are closed
DBT is the way forward for balanced fertiliser use
The flawed subsidy and pricing policy followed by governments for years has led to excessive use of urea and a deterioration in soil health The subsidy is given directly to the farmers even as the manufacturers charge consumers a price that fully covers the cost of supply. For over a decade, Indian agriculture has been grappling with an imbalance in fertiliser use involving excessive use of nitrogen or ‘N’ vis-à-vis phosphate or ‘P’ and potash or ‘K’ even as the present NPK use ratio at 6.7:2.4:1 (against the desired 4:2:1) is tilted in favour of ‘N’. This, in turn, has led to a decline in crop yield, deterioration in soil health and adverse impact on the environment. The imbalance has...
More
Comments are closed