NEW DELHI: The government is likely to earmark nearly $19 billion in the budget to compensate fertiliser companies for selling their products to farmers at lower than market prices, according to people with knowledge of the matter.
The finance ministry has penciled Rs 1.4 lakh crore ($18.8 billion) as fertilizer subsidy in the budget due February 1, up from Rs 1.3 lakh crore in the year ending March 31, due to higher raw material costs, the people said, asking not to be identified as the information is not public. Discussions are still going on and a final decision is yet to be taken.
The increased spending comes ahead of crucial polls and amid efforts by the ruling BJP to win over farmers after facing massive protests against new laws that have since been scrapped.
Nearly 60% of India’s 1.4 billion population depends on farming directly or indirectly for their livelihood and their support is key for winning elections.
A finance ministry spokesman was not immediately available for a comment.
The government had substantially raised fertiliser subsidy in the current year amid the protests after allocating nearly Rs 80,000 crore in the budget unveiled in February 2021.
