Union Cabinet Approves Extension of Special Package for DAP Subsidy

The Union Cabinet, led by Prime Minister Narendra Modi, has approved the extension of the One-time Special Package for Di-Ammonium Phosphate (DAP) beyond the existing Nutrient Based Subsidy (NBS) scheme. The extension, amounting to Rs 3,500 per metric ton, will take effect from January 1, 2025, and remain in force until further orders.

This decision aims to ensure the sustainable availability of DAP at affordable prices for farmers while maintaining price stability amid global market fluctuations and geopolitical tensions, according to an official statement.

Key Highlights of the Decision:

• Extension Period: Effective from January 1, 2025, until further notice.
• Additional Subsidy: Rs 3,500 per metric ton over and above the NBS scheme.
• Objective: To safeguard farmers against price volatility and guarantee access to essential agricultural inputs.

The Special Package is part of the government’s ongoing efforts to prioritize farmers' welfare. Under the NBS scheme, which began in April 2010, 28 grades of Phosphatic and Potassic (P&K) fertilizers, including DAP, have been made available at subsidized rates. Despite challenges such as global market volatility and geopolitical constraints, the government has continued to ensure affordable prices for fertilisers.

Previous Package:

In July 2024, the Cabinet approved a similar package for the period from April 1, 2024, to December 31, 2024, involving a financial outlay of Rs 2,625 crore. This earlier package successfully stabilized DAP prices during critical agricultural seasons, reaffirming the government’s commitment to supporting farmers.

The extended package highlights the government’s focus on maintaining a smooth supply chain and addressing the challenges posed by fluctuating global markets, ensuring that farmers remain unaffected by price volatility.