After the most recent round of subsidy hikes for non-urea fertilisers, an anomaly a number of trade gamers stated had apparently cropped up in favour of Di-Ammonia Phosphate (DAP) over NPKS in subsidy allocation appears to have been considerably corrected.
This divergence has been a supply of trouble for a number of massive gamers in the non-urea advanced fertiliser house, a few of whom additionally complained of being compelled to work in much less than optimum capability.
Capacity utilisation dropped as a result of realisations on NPKS suffered as subsidy allocation didn’t totally cowl the manufacturing price which has risen sharply resulting from world components whereas however there was an unofficial cap on retail value, trade gamers stated.
In the final two rounds of subsidy hikes first in May 2021 and thereafter in October 2021, a number of trade gamers complained that in phrases of absolute allocation of subsidy DAP was favored over NPKS beneath the Nutrient-based subsidy regime. This is as a result of the per kilogram subsidy for phosphorus (P) was higher than potassium, nitrogen and Sulphur.
This was carried out regardless of it being generally believed that between DAP and NPKS, the latter is a way more balanced plant nutrient than the previous. DAP is the second most consumed fertiliser in the nation, after urea.
So, in May 2021, when the Central authorities first raised the subsidy on non-urea fertiliser beneath the Nutrient-based subsidy regime, the subsidy on phosphorus (which is the principle constituent in DAP) was raised to Rs 45.323 per kg from Rs 14.888 per kg (a rise of over 200 per cent), whereas that of nitrogen, potash and Sulphur was mounted at a lot decrease at Rs 18.789 per kg, Rs 10.116 per kg (P) and a couple of.374 per kg for Sulphur.
Thereafter, in October 2021, the Centre once more prolonged the subsidy on NPK beneath the nutrient-based subsidy regime for an additional six months.
However, as an ad-hoc association, it determined to offer an additional subsidy of Rs 8769 per tonne to DAP whereas the identical additional subsidy for some merchandise of NPK was settled at Rs 2000 per tonne.
Following the 2 consecutive hikes in non-urea fertiliser subsidy favouring DAP over NPKS, a number of trade gamers had complained of correcting this anomaly which was hurting their efficiency as nicely.
After persistent effort and in view of sharp improve in NPKS fertiliser charges each in their uncooked supplies and in addition in completed merchandise, the Centre in its newest round of subsidy hikes introduced a number of days again for non-urea fertilisers, reversed a number of the development.
This time it reserved the utmost improve in subsidy for nitrogen (NPK) of just about 390 per cent from Rs 18.789 per kg to straight to Rs 91.96 per kg, whereas potassium(Okay) subsidy was raised from Rs 10.116 per kg to Rs 25.31 per kg, a hike of 150.2 per cent.
Sulphur subsidy was raised from Rs 2.374 per kg to Rs 6.94 per kg, a rise of 192.3 per cent.
In distinction, subsidy on phosphorus (P) – the principle ingredient for DAP– was raised from Rest 45.323 per kg to Rest 72.74 per kg, a rise of 60.5 per cent (see chart).
This hike is legitimate until September 30, 2022. Consequently, per ton improve in subsidy in DAP and its merchandise has additionally been lesser as in comparison with completely different grades of NPKS.