India's Fertiliser Subsidy Projected to Exceed Rs 3 trillion as Reform Calls Grow

Government officials warn that India’s fertiliser subsidy could top Rs 3 trillion this fiscal year, up from Rs 2.51 trillion in FY23, as the West Asia crisis pushes global input costs. Joint Secretary Krishna Kant Pathak noted that India holds "sufficient stocks of fertilisers, in excess of 20 million tonnes" and highlighted low soil‑absorption rates for urea, urging a shift to higher‑absorption options such as ammonium sulphate.

Analysts argue the current subsidy model, which reimburses fertiliser companies via point‑of‑sale Aadhaar verification, fails to reach farmers directly and fuels over‑use, diversion and environmental harms. They propose a farmer‑centred direct benefit transfer, with per‑hectare cash entitlements and nutrient caps, which could save between ₹50 000 crore and ₹1 lakh crore by curbing leakage and reducing dependence on cheap urea.

The debate underscores the fiscal strain of the subsidy, its impact on agricultural practices, and the growing call for structural reform.