Union Cabinet Increases Anti-Rabi Fertilizer Subsidy by 64% to ₹ 62,370 Crore | Today’s news

NEW DELHI: The Center has approved a 64% year-on-year increase in fertilizer subsidy for the ongoing rabi season on ₹62,370 crore as it struggles to keep farm input costs affordable amid fluctuating global prices. However, the move could put pressure on the center’s fiscal year 2027 (FY27) fertilizer budget, potentially requiring additional funding.

The increase comes after rice acreage fell by 3.46% year-on-year during the 2026 kharif season and ahead of the next cropping cycle where wheat, pulses and oilseeds are the key crops.

Announcing the decisions taken at a Union Cabinet meeting on Wednesday, Information and Broadcasting Minister Ashwini Vaishnaw said India has fertilizer stocks of about 23.5 million tonnes, against a requirement of 35 million tonnes for this year’s rabies season. According to him, the higher subsidy was supposed to ensure sufficient supplies of basic soil nutrients at affordable prices for farmers.

The Cabinet approved the total expenditure ₹77,101 crore under several measures including fertilizer subsidy, loan guarantees for micro enterprises and disadvantaged entrepreneurs, New Delhi Museum and Noida Metro expansion.

Growing subsidy bill

The largest component is ₹62,370 crore under the Nutrient Based Subsidy (NBS) scheme for Phosphorous and Potassium (P&K) fertilizers during rabi season 2026-27. This is comparable to a budget request ₹37,952 crore for the previous rabi season.

A higher requirement could put pressure on the centre’s fertilizer subsidy budget. Against the NBS allocation for fiscal year 27 ₹The government spent 54,000 million crowns ₹33,664 million crowns will leave by the end of September ₹20,336 crores. The newly approved seasonal requirement is therefore about ₹$42,034 million higher than the remaining provision, which may require additional budget support.

The higher subsidy comes at a time of fluctuating international prices of fertilizers and inputs including ammonium phosphate (DAP), muriate of potash (MOP) and sulphur. The government has maintained a special provision to ensure that DAP is available to farmers at the address ₹1,350 per 50 kg bag, beyond the NBS subsidy.

The approved NBS rates for the four nutrients are ₹94.21 per kg of nitrogen, ₹66.11 for phosphorus, ₹2.38 for potash and ₹10.42 per sulphur. Prices will be valid from October 1, 2026 to March 31, 2027.

The package also includes a support mechanism for domestic producers of sulfur-based fertilizers. Under it, producers will get 20% of the actual procurement cost, subject to a floor price of $800 per tonne of sulfur and $266.67 per tonne of sulfuric acid, Vaishnaw said.

“The revision of NBS rates for rabi 2026-27, along with various support measures taken during the year, demonstrates the government’s strong commitment to protect farmers from fluctuations in the global fertilizer and input markets. It will help ensure adequate availability of P&K fertilizers at affordable prices, promote balanced plant nutrition and provide an important boost to domestic production,” said S. Sankarasubramanian, Chairman of the India Association (Ferasubramanian).

Government data showed total fertilizer stocks stood at 23.52 million tonnes as of November 10, up from 17.35 million tonnes a year earlier. Urea stocks rose to 10.31 million tonnes from 7.21 million tonnes, while DAP stocks rose to 2.86 million tonnes from 2.48 million tonnes. NPK stocks rose to 6.08 million tonnes from 4.24 million tonnes.

Credit guarantees and infrastructure

The Union Cabinet approved the continuation of two loan guarantee programs aimed at expanding access to finance.

The Credit Guarantee Fund for Micro Units (CGFMU) will continue for a period of five years up to 31 March 2031 with a corpus of ₹5,000 million crowns. The scheme provides guarantees to lending institutions against default on eligible loans made under the Pradhan Mantri Mudra Yojana (PMMY).

The guarantee will cover Mudra loans up to ₹20 thousand, overdraft up to ₹10,000 under Pradhan Mantri Jan Dhan Yojana and eligible self help group loans. The annual guarantee fee for Mudra loans has been reduced from 1% to 0.75%, Vaishnaw said.

The Cabinet also approved the continuation of the Stand-Up India program till March 2031 with a loan guarantee corpus of Rs ₹4,111 million. The objective of the program is to extend financial assistance to another 2.5 million entrepreneurs from women and Scheduled Castes and Scheduled Tribes.

Separately, ₹3,230 crore has been approved for the development of the Yuge Yugeen Bharat Museum in the historic North and South Block complexes in New Delhi. The project will change the purpose of the buildings, preserve their architectural character and at the same time transform them into a national cultural institution. It is expected to be completed within three years, the minister said.

The government expects the museum to accommodate 30,000 visitors a day and attract up to one million visitors a year. The project will be implemented between FY27 and FY31, with the first gallery, themed around ornaments, expected to open in the second half of 2027.

He also cleaned the cabinet ₹2,390 crore for the 8,449 km extension of the Aqua Metro Noida Line from Sector 51 to Greater Noida Sector 4. The extension will have five elevated stations, is expected to be completed in four years and will provide an interchange with the Delhi Metro Blue Line in Noida Sector 61.