Union Cabinet Decides to Raise Fertilizer Subsidy 

Syllabus:GS3/Economy

In News

• The Union Cabinet approved the proposal of the Department of Fertilizers for fixing the Nutrient Based Subsidy (NBS) rates for RABI Season 2025-26 (from 01.10.2025 to 31.03.2026) on Phosphatic and Potassic (P&K) fertilizers.

About the proposal

• The government is making available 28 grades of P&K fertilizers including DAP to farmers at subsidized prices through fertilizer manufacturers/importers. 
• The subsidy on P&K fertilizers is governed by NBS Scheme w.e.f. 01.04.2010. 
• In accordance with its farmer friendly approach, the Government is committed to ensure the availability of P&K fertilizers to the farmers at affordable prices.
• The subsidy would be provided to the fertilizer companies as per approved and notified rates.

Reasons Behind the Subsidy Hike

• Global Price Volatility: Rising international prices of raw materials like urea, DAP, MOP, and sulphur have increased the cost of fertilizer imports.
  • The subsidy aims to cushion farmers from these global shocks.
• Nutrient-Based Subsidy (NBS) Scheme: Under the NBS framework, the government adjusts subsidy rates based on nutrient content and market dynamics. The current revision reflects updated import costs and nutrient needs.
• Farmer Welfare and Food Security: Ensuring timely and affordable access to fertilizers is critical for sustaining crop yields and supporting rural livelihoods, especially during the Rabi season when wheat, pulses, and oilseeds are sown.

Expected Outcomes

• Enhanced Crop Productivity: Timely access to balanced nutrients will support optimal crop growth and yield.
• Price Stability for Farmers: The subsidy will shield farmers from market fluctuations and reduce input cost burdens.
• Boost to Rural Economy: Increased agricultural output can stimulate rural demand and employment.

Suggestions and Way Ahead 

• India has already added urea capacity in recent years. Continued investment in indigenous manufacturing will reduce import dependency.
• The fertilizer subsidy hike for Rabi 2025 is a strategic intervention to stabilize agricultural input costs, support farmers, and ensure food security amid global uncertainties. As India navigates climate challenges and market volatility, such proactive measures will be key to building a resilient and inclusive agricultural economy.

Source :TH