Cabinet okays subsidy for crop nutrients, revamped scheme to prop up farm income

NEW DELHI: The Union cabinet chaired by Prime Minister Narendra Modi on Wednesday approved ₹24,475.53 crore as a provisional subsidy for nutrient-based phosphatic and potassic (P&K) fertilisers for the upcoming rabi or winter-sown season. The cabinet also cleared fresh allocations to the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), a scheme to cushion farm incomes, according to information and broadcasting minister Ashwini Vaishnaw.
The nutrient-based subsidy regime offers fertilisers at lower-than-market price to farmers based on their phosphatic and potassic content, which is aimed at discouraging overuse.
Food security in the world’s most populous country is closely linked to the adequate availability and affordability of key fertilizers, which along with improved seeds helped spur a green revolution in the 1960s.
The government makes available 28 grades of P&K fertilizers to farmers at subsidised prices through manufacturers and importers. These crop nutrients are sold by manufacturers at a discount, who are then reimbursed by the government.
The cabinet also cleared a proposal to make an outlay of ₹35,000 crore for PM-AASHA, an existing scheme to intervene in markets when farm-produce prices crash.
Launched in 2018, PM-AASHA, a combination of three sub-schemes, allows state governments to purchase farm produce, such as pulses and oilseeds, when market rates fall below floor prices set by the government and cause losses to growers.
The sharply higher outlay to PM-AASHA cleared by the cabinet will be the total financial outgo during 15th Finance Commission period that includes the fiscal year 2025-26, a government statement said.
The full Union budget presented in July provisioned ₹6,437 crore for PM-AASHA. In 2023-24 (revised estimates), the scheme was allotted ₹2,200 crore but the budget estimates that year provided just ₹1 lakh, disappointing farmers. In 2022-23, the scheme had zero spending and allocation.
The government has converged the price support scheme (PSS) and price stabilization fund (PSF), two sub-schemes under PM-AASHA for efficiency. “This integration will bring in more effectiveness in the implementation, which would not only help in providing remunerative prices to the farmers for their produce but also control the price volatility of essential commodities by ensuring availability,” an official said.