Lok Sabha Question No. 4743 (UNSTARRED), answered on 2025-03-28
Subject: Reduced Budgetary Allocation
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Dr. Kalanidhi Veeraswamy

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS AND FERTILIZERS DEPARTMENT OF FERTILIZERS

## LOK SABHA

UNSTARRED QUESTION NO. 4743 TO BE ANSWERED ON

## : 28.03.2025

## Reduced Budgetary Allocation

## 4743.  DR. KALANIDHI VEERASWAMY:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) the reasons behind the decrease in the budget allocation for the Chemicals & Fertilizers  sector  which  is  a  crucial  sector  that  impacts  agriculture,  industry and food security by 13.2% in the current financial year;
- (b) the manner  in which the Government  plan  to ensure the continued availability  and  affordability  of  essential  fertilizers  for  farmers,  particularly given the critical role of fertilizers in ensuring food security;
- (c) the measures proposed to be taken up by the Government to prevent price increases or shortages in the fertilizer market due to this budgetary reduction along with the manner in which it will affect the Government's commitment to supporting farmers, particularly in rural areas; and
- (d) whether  the  Government  is  aware  of  the  expected  impact  of  this  reduced allocation on the production and supply of chemicals and fertilizers, especially  with  regard  to  initiatives  like  the  Nutrient  Based  Subsidy  (NBS) and the Pradhan Mantri Krishi Sinchayee Yojana?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF CHEMICALS & FERTILIZERS

## (SMT. ANUPRIYA PATEL)

(a)  &  (d): The Budget estimation of the Department of Fertilizers is made on the basis of likely consumption of fertilizers in the country, price of natural gas which is the  major  input  cost  in  the  fertilizer  production  and  international  prices  of  the finished  fertilizer  products  may  vary  from  one  year  to  another.  As  against  the Budget allocation of Rs. 1,68,130.81 crore in Budget Estimate (BE) 2024-25, the final  allocation  has  increased  to  Rs.  1,91,836.29  crore  through  Supplementary Demands for Grants passed by the Parliament.

Similarly, in NBS scheme, against the Budget Allocation of Rs. 45,000 crores in  BE  (2024-25),  the  final  allocation  has  increased  to  Rs.  54310  crores  through Supplementary  Demands  for  Grants  passed  by  the  Parliament.  Therefore,  there has been no reduction in funds for NBS.

In Pradhan Mantri Krishi Sinchayee Yojana, extended till 2025-26, the overall outlay  of  Rs.  93,068.56  crores  have  been  approved  by  the  Government  for  the period 2021-22 to 2025-26.

(b) & (c): To ensure timely and adequate supply of fertilizers in the country, before the  commencement  of  each  cropping  season,  Department  of  Agriculture  and Farmers  Welfare  (DA&FW),  in  consultation  with  all  the  State  Governments, assesses  the  state-wise  &  month-wise  requirement  of  fertilizers.  On  the  basis  of requirement  projected,  Department  of  Fertilizers  allocates  sufficient/  adequate quantities  of  fertilizers  to  States  by  issuing  monthly  supply  plan  and  continuously monitors  the  availability.  The  movement  of  all  major  subsidized  fertilizers  is monitored  throughout  the  country  by  an  on-line  web  based  monitoring  system called  integrated  Fertilizer  Monitoring  System  (iFMS).  Regular  Weekly  Video Conference  is conducted jointly by DA&FW  and  D/o  Fertilizers with State Agriculture  Officials  and  corrective  actions  are  taken  to  dispatch  fertilizers  as indicated by the State Governments. The gap between demand (requirement) and production of fertilizers  is  met  through  imports.  The  import  for  the  season  is  also finalized well in advance to ensure timely availability.

Urea, is provided to the farmers at a statutorily notified Maximum Retail Price (MRP). The  MRP of 45 kg  bag  of  urea  is  Rs.242  per  bag  (exclusive  of  charges towards  neem  coating  and  taxes  as  applicable)  and  the  MRP  has  remained unchanged since 01.03.2018 to till date. The difference between the delivered cost of urea at farm gate and net market realization by the urea units is given as subsidy to  the  urea  manufacturer/importer  by  the  Government  of  India.  Accordingly,  all farmers are being supplied urea at the subsidized rates.

For  Phosphatic  &  Potassic  (P&K)  fertilizers,  Government  has  implemented Nutrient  Based Subsidy (NBS) scheme w.e.f. 01.04.2010. Under NBS scheme, a fixed  amount  of  subsidy,  decided  on  annual/bi-annual  basis,  is  provided  on subsidized P&K  fertilizers  depending  on their nutrient content including DiAmmonium Phosphate (DAP). Under NBS scheme, The P&K sector is decontrolled, fertilizer companies are allowed to fix MRP at reasonable levels which is  monitored  by  the  Government..  The  fertilizer  companies  manufacture/import fertilizers as per the market dynamics.

Further, in order to ensure smooth availability of DAP at affordable prices to farmers, Government has provided special packages on DAP over and above the NBS  subsidy  rates  on  need  basis.  Recently,  in  2024-25,  due  to  geo-political situation,  adversely  affecting  the  viability  of  procurement  of  DAP  by  the  fertilizer companies,  the  Government  has  approved  One-time  special  package  on  DAP beyond the NBS rates on actual PoS (Point of Sale) sale of DAP for the period from 01.04.2024  till  31.12.2024  @  ₹  3500  per  MT  which  has  now  been  extended  till 31.03.2025  to  ensure  sustainable  availability  of  DAP  at  affordable  price  to  the farmers. Further, the guidelines on evaluation of reasonableness of MRPs fixed by the  P&K  Fertilizer  companies  also  ensure  availability  of  fertilizers  at  affordable prices to farmers across the country.

In  addition,  Department  of  Fertilizers  consistently  engages  in  discussions with resource rich countries for enhancing the supply of fertilizers/raw materials/intermediates from these countries to India at competitive price, to ensure their  availability  in  the  country  at  affordable  prices.  Additionally,  Department  of Fertilizers  facilitates  signing  of  Agreements  or  Memorandum  of  Understanding (MoU)  between  Indian  fertilizer  companies  and  resource  rich  foreign  fertilizer companies for consistent and reliable supply of fertilizers/raw material/intermediates to India.