India to include $19 billion in Budget 2022 to compensate fertilizer industries
According to persons’ who have direct knowledge of the matter, the Indian government is likely to include about $19 billion in the Union Budget 2022 to compensate fertilizer industries for selling their products to farmers at lower-than-market prices.
The finance ministry has budgeted Rs 1.4 lakh crore ($18.8 billion) for fertilizer subsidies in the budget due February 1, up from Rs 1.3 lakh crore in the fiscal year ending March 31, due to higher raw material costs, according to people who asked not to be identified because the information is not public. Discussions are still ongoing, and no final decision has been made.
The increased spending comes ahead of important local elections and as the ruling Bhartiya Janata Party tries to win back farmers after major protests against agriculture new laws that have since been repealed. Nearly 60% of India’s 1.4 billion people rely on agriculture for a living, either directly or indirectly, and their support is critical for winning elections.
Despite the protests, the government increased fertilizer subsidies significantly in the current fiscal year after investing approximately 800 billion rupees in the February 2021 budget.