Budget: Govt plans Rs 1.4-trn fertiliser subsidy for farmers, says report

The increased spending comes ahead of crucial assembly polls and amid efforts by the ruling BJP to win over farmers after facing massive protests against new laws that have since been scrapped

India is likely to earmark nearly $19 billion in the federal budget to compensate fertiliser companies for selling their products to farmers at lower than market prices, according to people with knowledge of the matter.

The finance ministry has penciled in Rs 1.4 trillion ($18.8 billion) as fertiliser subsidy in the budget due Feb. 1, up from Rs 1.3 trillion in the year ending March 31, due to higher raw material costs, the people said, asking not to be identified as the information is not public. Discussions are still going on and a final decision is yet to be taken.

The increased spending comes ahead of crucial assembly polls and amid efforts by the ruling Bhartiya Janata Party to win over farmers after facing massive protests against new laws that have since been scrapped. Nearly 60% percent of India’s 1.4 billion population depends on farming directly or indirectly for their livelihood and their support is key for winning elections. 

A finance ministry spokesman was not immediately available for a comment.

The government had substantially raised fertiliser subsidy in the current year amid the protests after allocating nearly Rs 80,000 crore in the budget unveiled in February 2021.