The central government has decided to increase the subsidy for di-ammonium phosphate fertiliser at a time when price of the key agriculture input is rising in the international market.
The government said subsidy for the fertiliser would be hiked to Rs 1,200 per bag from Rs 500 per bag. Price of fertilisers is increasing amid higher prices of raw inputs like phosphoric acid and ammonia, among others, internationally, the Prime Minister's Office said in a statement on May 19.
Last year, the actual price of DAP was Rs 1,700 per bag. With a government subsidy of Rs 500, companies were selling it to farmers for Rs 1,200 per bag. With the actual price now at Rs 2,400, the hike in subsidy will enable sales at the old price.
This, the government said, will entail an additional cost of Rs 14,775 crore to the central government's annual existing subsidy for chemical fertilisers of about Rs 80,000 crore.
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