The fertiliser subsidy may be up slightly, by up to Rs 6,000 crore, in the 2019-20 Budget as the government is mulling to provide more funds for both urea and nutrient-based fertilisers.
The total fertiliser subsidy in the interim Budget 2019-20 was pegged at Rs 74,996 crore which may see a minor upward revision by Rs 6,000-Rs 7,000 crore, informed sources said, adding the urea subsidy which stood at Rs 40,000 crore and the nutrient-based subsidy that was Rs 24,832 crore in the interim Budget may both see higher allocations, not exceeding a total of Rs 80,000-Rs 81,000 crore.
The revision would accommodate payment for import of urea and direct benefit transfer (DBT) among others, they said.
Fertiliser subsidy – one key component of India’s subsidy regime towards improving farmers’ lot – has been on the upswing in budgets during the NDA regime. In 2017-18, it was Rs 66,468 crore, in 2018-19, it was up to Rs 70,090.35 crore and in the interim Budget, it was set at Rs 74,996 crore.
The government has paid Rs 69,197.96 crore as fertiliser subsidy in 2017-18 and Rs 73,435.21 crore in 2018-19.
Many times to control fiscal deficits, fertiliser subsidies are rolled over to the next financial year. But there is currently a line of thinking in the government to provide this subsidy via DBT. If DBT comes into play, then the roll-over would not be possible, it has to be front-loaded and expenditure will be real-time.
The government bears over Rs 60,000 crore-Rs 70,000 crore annually as fertiliser subsidy to provide cheaper farm nutrients to farmers.