The government's fertiliser subsidy will rise to Rs 2.3-2.5 lakh crore in this fiscal but the bill may fall by 25 per cent in the 2023-24 financial year with moderation in global prices, according to industry body FAI.
Fertilisers Association of India (FAI) expressed concern that the fixed cost of urea has not been increased affecting the viability of urea plants. It also pointed out that the industry is running on a very thin margin, which is hampering new investments in this sector.
The industry body said there is sufficient availability of fertilisers, including urea and DAP, for the ongoing rabi (winter-sown) season.
"We estimate the fertiliser subsidy bill at Rs 2.3 lakh crore to Rs 2.5 lakh crore," FAI President K S Raju told reporters here late Monday.
This has helped insulate the farmers from the impact of a steep increase in the cost of all fertilisers due to sharp rise in international prices of fertilisers and raw materials, he added.
The fertiliser subsidy stood at Rs 1.62 lakh crore in the previous financial year.
FAI board member P S Gahlaut, who is MD of Indian Potash Ltd, said the subsidy bill in the next fiscal year could fall by around 25 per cent as the global prices have softened. However, he said a lot will depend on the future trends of global prices.