Cabinet Nod For Rs 3.7 Lakh Crore Agriculture Package
The existing urea subsidy scheme will continue till FY25 while the outlay will also cover three new initiatives.
The Union Cabinet approved several agricultural schemes with a combined outlay of Rs 3.7 lakh crore on Wednesday.
The schemes will include the continuation of the existing urea subsidy scheme till fiscal 2025 and also cover the introduction of three new initiatives, it said in a briefing.
The new schemes include the PM Programme for Restoration, Awareness Generation, Nourishment, and Amelioration of Mother Earth, also known as PM PRANAM; market development assistance to promote organic fertilisers; and the introduction of sulphur-coated urea to address soil deficiencies, which were announced in the Union budget 2023.
As an incentive to the state governments, the Union Minister for Chemicals and Fertilisers, Mansukh Mandaviya, announced that states that reduce their usage of chemical fertilisers and promote the use of alternate fertilisers will be eligible to receive 50% of the subsidy cost saved.
Urea Subsidy Continued
The Cabinet Committee on Economic Affairs approved the continuation of the existing urea subsidy scheme at a price of Rs 242 per 45 kg bag, excluding taxes and neem coating charges.
Of the total outlay of Rs 3.7 lakh crore, a major portion of Rs 3,68,676.7 crore has been committed for urea subsidy for the next three years till FY25. This is in addition to the recently approved nutrient-based subsidy of Rs 38,000 crore for kharif season 2023–24.
In February, the Union budget 2023 earmarked an outlay of Rs 1,75,099 crore for fertiliser subsidies, as against Rs 2,25,220 crore in the revised estimate for FY23.
"The scheme is wholly financed by the government of India through budgetary support. The continuation of the urea subsidy scheme will also maximise indigenous production of urea to reach self-sufficiency levels," a cabinet release on the subject said.
In a bid to bolster domestic urea production, the government plans to commission eight "nano urea plants" that will produce 44 crore, or 195 lakh metric tonnes, of conventional urea by FY26.
Organic Push
Through the PM PRANAM scheme, the Union government hopes to incentivise state governments to reduce the use of chemical fertilisers and ultimately bring down the subsidy burden.
As part of the scheme, 50% of the fertiliser subsidy saved by the state by reducing consumption of chemical fertilisers in a year, as compared with the previous three years' average consumption, will be awarded as a grant to that state, said Mandaviya.
The government expects total savings of Rs 19,452 crore through the PM PRANAM scheme, thereby not requiring any additional financial stimulus, Mandaviya said.
For the Market Development Assistance scheme, which is aimed at promoting organic fertilisers, Rs 1,451.84 crore has been approved. The allotment is also in line with the budget announcement to establish 500 new waste-to-wealth plants under the GOBARdhan scheme. Support under the scheme will be at Rs 1,500 per metric tonne and will be given only for manure produced under the initiative.
The Cabinet also announced the introduction of sulphur-coated urea, or 'urea gold'.
"It is more economical and efficient than the currently used neem-coated urea. It will address the sulphur deficiency in the soil in the country. It will also save input costs for the farmers and raise their incomes with enhanced production and productivity," the release said.
