NBS policy revision salutary for kharif

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CRISIL Research Impact Note
DAP
Nutrient Based Subsidy Rates
CRISIL Research
Fertilisers
manufacturers

May 25, 2021

NBS policy revision salutary for kharif

Crisil impact note

The development

This April, domestic non-urea fertiliser manufacturers undertook price hikes for di-ammonium phosphate (DAP) and other complex fertilisers because of an increase in raw material prices. As a result, the retail price of a bag (50 kg) of DAP rose to Rs 1,900 compared with Rs 1,200 prevailing until March
Consequently, the government revised the nutrient-based subsidy (NBS) rates for fertilisers until the end of the kharif season (October 31, 2021) this fiscal
Then on May 19, the government announced its plan to increase subsidy on DAP to Rs 1,200 per bag from Rs 500 per bag. And on May 20, it also hiked the NBS rate for phosphorous (P) content to Rs 45.324 per kg from Rs 14.888 per kg earlier. The revised NBS rates for DAP and other complex fertilisers will be effective May 20 through October 31 this year. The NBS rates for other nutrients such as nitrogen (N), potash (K), and sulphur (S) remain unchanged

Thus, subsidy on DAP has been raised by 137%, and for other complexes by up to 204%, based on the type of complex fertiliser
Farmers will now be able to purchase a bag of DAP (50 Kg) at old rates (Rs 1,200) with effect from May 20, 2021, compared with Rs 1,900 seen in April
All fertilisers with P content would be eligible for higher subsidy during the aforementioned period. The government has also included two complex fertilisers NPK (8-21-21) and NPK (9-24-24) under the NBS scheme. Please check the annexure for details on increase in subsidy for various types of fertilisers

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