Executive Summary:
This document answers questions raised in Lok Sabha regarding fertilizer subsidies in India. It details the subsidy amounts provided for various fertilizers from 2022-23 to 2025-26 (as of 21.07.2025). The document clarifies that all farmers benefit from subsidized fertilizer rates through the Direct Benefit Transfer (DBT) system, where subsidies are released to fertilizer companies based on actual sales authenticated via Aadhaar through PoS devices.
Key Points / Main Content:
Subsidy Details:
* Subsidy is provided for both imported and indigenous Urea and PK fertilizers.
* Total subsidy provided from 2022-23 to 2025-26 (as of 21.07.2025) is detailed in Crores.
* The DBT system ensures 100% subsidy on various fertilizer grades is released to fertilizer companies.
Urea Subsidy:
* Urea is provided at a statutorily notified Maximum Retail Price (MRP) of Rs. 242 per 45 kg bag (excluding neem coating charges and taxes).
* The government provides a subsidy to urea manufacturers/importers, covering the difference between the delivered cost and net market realization.
PK Fertilizer Subsidy:
* Nutrient Based Subsidy (NBS) Policy is implemented for Phosphatic and Potassic (PK) fertilizers since 01.04.2010.
* A fixed annual subsidy is provided based on nutrient content.
* Fertilizer companies fix MRP as per market dynamics, monitored by the Government.
Direct Benefit Transfer (DBT) System:
* Subsidy is paid to fertilizer companies (except for imported Urea) based on actual sales recorded through PoS machines.
* Buyer identity is verified through Aadhaar-based authentication.
* Sale of fertilizer is on a "no denial" basis to any Aadhaar authenticated beneficiary.
Impact Analysis:
Fertilizer Companies:
* Impact: Receive subsidy payments based on actual sales authenticated through PoS devices.
* Action Required: Ensure PoS devices are installed and functioning at retail shops for Aadhaar authentication and accurate sales recording.
Farmers (All Categories):
* Impact: Access subsidized fertilizers (Urea and PK) at reduced rates.
* Action Required: Utilize Aadhaar for authentication at the point of purchase via PoS devices to avail subsidized rates.
Government:
* Impact: Manages and disburses fertilizer subsidies through the DBT system.
* Action Required: Continue monitoring MRP of PK fertilizers and ensure efficient subsidy disbursement through DBT.
Retailers:
* Impact: Play a crucial role in facilitating the sale of subsidized fertilizers through Aadhaar authentication via PoS devices.
* Action Required: Maintain and operate PoS devices effectively to record sales and authenticate beneficiaries.
Key Entities Referenced
Ministry of Chemicals and Fertilizers: A ministry of the Government of India responsible for the chemical and fertilizer industries.
Department of Fertilizers: A department under the Ministry of Chemicals and Fertilizers, Government of India, specifically dealing with fertilizer-related matters.
Lok Sabha: The lower house of the Parliament of India, where the unstarred question was raised.
SHRI NALIN SOREN: Member of Parliament who raised the question about fertilizer subsidies.
SMT. ANUPRIYA PATEL: The Minister of State in the Ministry of Chemicals and Fertilizers who provided the answer.
Direct Benefit Transfer Scheme: A government initiative to transfer subsidies directly into the accounts of beneficiaries.
Aadhar: A 12-digit individual identification number issued by the Unique Identification Authority of India.
Nutrient Based Subsidy Policy: A policy implemented by the Government of India for Phosphatic and Potassic (PK) Fertilizers w.e.f. 01.04.2010.
GOVERNMENT OF INDIA
MINISTRY OF CHEMICALS AND FERTILIZERS
DEPARTMENT OF FERTILIZERS
LOK SABHA
UNSTARRED QUESTION NO.1053 TO BE ANSWERED ON 25.07.2025
Subsidy on Fertilizers
1053: SHRI NALIN SOREN:
Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:
(a) the details of subsidy provided by the Government for various fertilizers during
each of the last three years and the current year, State/UT-wise and fertilizer-
wise;
(b) whether the poor and marginal farmers have benefited from the subsidy provided
on fertilizers and if so, the reaction of the Government thereto;
(c) whether the Government proposes to provide subsidy on fertilizers directly into
the accounts of farmers through Direct Benefit Transfer Scheme; and
(d) if so, the date by which the Government is likely to take a final decision in this
regard?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF CHEMICALS & FERTILIZERS
(SMT. ANUPRIYA PATEL)
(a): Under ‘DBT in Fertilizers’ system, 100% subsidy on various fertilizer
grades is released to the fertilizer companies, on actual sales to the beneficiaries
based on Aadhar authentication through POS devices installed at each retail shop. All
farmers (including small, medium and large farmers) are being supplied fertilizers at
the subsidized rates on no-denial basis. The details of total fertilizer subsidy provided
by the Government from 2022-23 to 2025-26 (as on 21.07.2025) are as follows:
(Amount in Crores)
Financial Year Subsidy Schemes Grand
Total
Imported Indigenous Indigenous Imported
P&K P&K Urea Urea
2022-23 36032.56 50089.67 127311.05 41365.60 254798.88
2023-24 28929.57 36270.00 102027.00 28193.94 195420.51
2024-25 18800.00 34010.00 103319.50 21000.00 177129.50
2025-26 3977.77 10404.59 30940.82 4006.70 49329.88
(as on 21.07.2025)
Grand Total 87739.90 130774.26 363598.37 94566.24 676678.77-2-
(b): With regard to urea fertilizer, urea is provided to the farmers at a statutorily
notified Maximum Retail Price (MRP). The MRP of 45 kg bag of urea is Rs. 242 per
bag (exclusive of charges towards neem coating and taxes as applicable). The
difference between the delivered cost of urea at farm gate and net market realization
by the urea units is given as subsidy to the urea manufacturer/importer by the
Government of India. Accordingly, all farmers are being supplied urea at subsidized
rates.
In respect of P&K Fertilizers, the Government has implemented Nutrient
Based Subsidy Policy w.e.f. 01.04.2010 for Phosphatic and Potassic (P&K) Fertilizers.
Under the policy, a fixed amount of subsidy, decided on annual basis, is provided on
subsidised P&K fertilizers depending on their nutrient content. Under this policy, MRP
is fixed by fertilizer companies as per market dynamics at reasonable level which is
monitored by the Government.
Accordingly, any farmer who is buying these fertilizers is getting benefits
of subsidy.
(c) & (d): The DBT system entails payment of subsidy to the Fertilizers
manufacturing/importing companies (except imported Urea) on the basis of actual
sales through PoS machines by the retailer to the beneficiary. The buyer’s identity is
verified through Aadhar based authentication. Sale of fertilizer is being done on a ‘no
denial basis’ since there is no defined beneficiary. Any Aadhar authenticated
beneficiary can purchase fertilizer on the basis of Aadhaar authentication including
poor and marginal farmers.
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