In recent news, the Cabinet Committee on Economic Affairs (CCEA) has announced a cut in the subsidy for non-urea fertilizers. The revised subsidy is approximately 3% lower than the projected spend on nutrient based subsidies in the fiscal year 2019-20.
Decreased Prices for Key Non-Urea Fertilizers
This decision by the CCEA has impacted the prices of Nitrogen (N), Phosphorus (P), Potash (K), and Sulphur (S) based fertilizers. The cost of Nitrogen-based fertilizers has decreased from ₹18.90 per kg to ₹18.78 per kg. Similarly, the price of Phosphorus-based fertilizers has lowered from ₹15.21 per kg to ₹14.88 per kg.
For Potash-based fertilizers, the price has seen a downwards movement from ₹11.12 per kg to ₹10.11 per kg. Lastly, the rate of Sulphur-based fertilizers took a dip from ₹3.56 per kg to ₹2.37 per kg. Additionally, the CCEA has endorsed the incorporation of ammonium phosphate [(NH₄)₃PO₄], a complex fertilizer, under the nutrient-based subsidy (NBS) scheme.
Nutrient Based Subsidy Scheme Explained
Administered by the Department of Fertilizers, Ministry of Chemicals & Fertilizers, the Nutrient Based Subsidy Scheme has been operational since April 2010. The NBS is characterized by an annually determined fixed amount of subsidy on each category of subsidized Phosphatic & Potassic (P&K) fertilizers, excluding Urea, depending on the nutrient content present.
Primary recipients of this subsidy are secondary nutrients such as N, P, K, and S which play a crucial role in crop growth and development. The fundamental objective of the scheme is to make fertilizers affordable for farmers since these non-urea fertilizers’ retail prices are deregulated and are determined by the manufacturers.
About Cabinet Committee on Economic Affairs (CCEA)
The CCEA, presided over by the Prime Minister, is responsible for setting public sector investment priorities and reviewing proposals for investments exceeding certain levels, periodically revised. The CCEA is entrusted with the continuous review of economic trends, analyzing issues, and prospects with a keen eye towards developing a coherent and integrated economic policy framework for the country.
The scope of the CCEA also extends to directing and synchronizing all economic field policies and activities, including foreign investment, that require top-tier policy decisions. In addition to the CCEA, there are seven other cabinet committees. These include the Appointments Committee of the Cabinet, Cabinet Committee on Accommodation, Cabinet Committee on Parliamentary Affairs, Cabinet Committee on Political Affairs, Cabinet Committee on Security, Cabinet Committee on Investment and Growth, and Cabinet Committee on Employment & Skill Development.