New Delhi, May 20 (PTI) The Centre on Thursday notified an increase in the subsidy of DAP and other P&K fertilisers, which will be applicable till October this year.

The subsidy on phosphatic and potassic (P&K) fertilisers is governed by the Nutrient Based Subsidy (NBS) Scheme since 2010. In April, the NBS rates for nutrients (Nitrogen, Phosphate, Potash and Sulphur) were kept unchanged for the current fiscal.

However, on May 19, the high-level meeting chaired by Prime Minister Narendra Modi decided to hike the subsidy on phosphate to ensure Di-ammonium Phosphate (DAP) is available to farmers at old rates despite an increase in the global market.

After urea, DAP is the widely consumed fertiliser by farmers in the country.

Issuing a notification in this regard, the Fertiliser Ministry said the NBS rate on phosphate has been increased to Rs 45.32 per kg from Rs 18.78 per kg last year.

Whereas the NBS rates for nitrogen, potash and sulphur remain unchanged at last year's level.

The enhanced subsidy on DAP and other grades of P&K fertilisers would be applied till October 31 from the date of the notification issued on May 20, the ministry said.

This means, the subsidy of DAP fertiliser per bag (of 50 kg) has been hiked from Rs 500 to Rs 1,200 per bag, which is an increase of around 140 per cent, the ministry said in a statement.

Accordingly, a higher subsidy is given on various grades of fertilisers that have a nutrient content of 'phosphate'.

This would cost the exchequer an additional subsidy burden of Rs 14,775 crore, out of which Rs 9,125 crore for DAP and Rs 5,650 crore for NPK-based complex fertiliser.

Annually, the government spends Rs 80,000 crore on subsidies for chemical fertilisers.

The ministry said due to the rise in global prices of raw materials of DAP and other P&K fertilisers, domestic prices of DAP had increased to Rs 2,400 per bag, which companies were selling at Rs 1,900 per bag after a subsidy of Rs 500 per bag.

The statement said that Union Fertiliser Minister D V Sadananda Gowda has directed his officials to closely monitor the availability, supply and prices of the fertiliser in close coordination with the states. The government asked companies not to sell P&K fertilizers at the higher MRP (as per the old subsidy rates) from the date of this notification.

"If any instance of selling the P&K fertilizer at the higher MRP comes into the knowledge of the Department of Fertiliser, strict action will be taken against the defaulting company," it noted.

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