In the fiscal year 2023-24 starting April 1, the Center is considering spending a total of Rs 1 lakh crore to Rs 1.5 lakh crore on fertilizer subsidy. It is estimated to be Rs 2.2 lakh crore in the current financial year. It should be noted that the government has spent more money in the fertilizer subsidy sector compared to the budget allocation of the current financial year to increase the price of fertilizers.
If less money is allocated to the subsidy sector in Surrey, it will definitely help to achieve the target of reducing the budget deficit of the Central Government. Food and energy costs have skyrocketed since Russia invaded Ukraine. Due to this, the expenditure is expected to increase by about 70 percent compared to the amount allocated by the Center for food, fertilizer and fuel sectors in the current fiscal year’s budget.
Meanwhile, there are other dangers of cutting Surrey subsidies. While the Reserve Bank of India (RBI) and the Center have taken a number of steps to control price inflation, there is a strong possibility that food prices will spiral again if subsidies are cut. Fertilizer companies sell fertilizers to farmers at below market rates. The difference in these prices is subsidized by the Center to the companies. If the central government reduces the subsidy, the price of fertilizers will naturally increase. A section of experts say that many farmers will use less fertilizer than required because it is not possible to buy enough fertilizer by spending more money. In that case, agricultural production in India will be at risk.
However, Central Government officials are hoping that as the price of fertilizers will decrease across the world, domestic production of fertilizers in India will also increase. They said discussions on reducing the Surrey subsidy bill are ongoing and no final decision has been taken yet. One-third of India’s total fertilizer requirement is imported.
A spokesperson for the Union Finance Ministry declined to comment. On the other hand, there was no response from the Union Ministry of Fertilizers.