Cabinet approves Rs 62,370 crore fertiliser subsidy for rabi season, up 64 per cent

The Centre has taken a major decision to keep fertiliser available at affordable prices for rabi season crops. The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the subsidy on phosphatic and potassic (P&K) fertilisers for rabi 2026-27.

A provision of Rs 62,370.02 crore has been made for this. The subsidy is about 64 per cent higher than in the previous rabi season. The decision will let farmers get several fertilisers, including DAP and NPKS, at subsidised prices.

The subsidy approved by the Cabinet will apply for six months, from October 1, 2026 to March 31, 2027. In the previous rabi season, 2025-26, the provision for fertiliser subsidy was Rs 37,952.29 crore. This time it has gone up by Rs 24,417.73 crore. The decision was taken in view of changes in the prices of fertilisers and raw materials in the international market.

The subsidy covers various grades of di-ammonium phosphate (DAP) and fertilisers containing nitrogen, phosphorus, potassium and sulphur (NPKS). The subsidy rates have been fixed by looking at international prices of urea, DAP, muriate of potash (MOP) and sulphur. Under the scheme, companies that manufacture and import fertiliser will be paid the subsidy at the approved rates. The government's aim is to ensure farmers get fertiliser at a fair price.

At the same meeting, the Union Cabinet extended by five years the credit guarantee fund for micro enterprises under the Pradhan Mantri Mudra Yojana. A fund of Rs 5,000 crore has been approved for this, and the facility will remain in force until March 31, 2031. It is estimated that over the next five years the fund could provide credit guarantee cover to Mudra loans worth about Rs 12.6 lakh crore.

With these decisions, the Cabinet has on one hand sharply increased the fertiliser subsidy for farmers and on the other extended the loan guarantee facility for small entrepreneurs.