PM Khad Yojana 2024 - 50% Subsidy on Purchase of Nano-Fertilisers by Farmers

Central government will launch 2nd component of PM Khad Yojana on 6th July 2024. Under this second component, the Union govt. will provide 50% assistance on the purchase of nano-fertiliser by the farmers. This component is a part of the AGR-2 initiative of the Indian government for the financial year 2024-25. 1st component of PM Khad Yojana namely PM Kisan Khadya Yojana is already running to provide fertilizer subsidy to farmers. Read this article till the end to know details about both 2nd component and 1st component of PM Khad Yojana.

PM Khad Yojana 2nd Component Launch 

Union Home Minister and Minister of Cooperation Amit Shah will launch the PM Khad Yojana 2nd component for 50% assistance on the purchase of nano-fertiliser by the farmers under the AGR-2 Scheme of the central government. This new component PM Khad Yojana would be applicable for the financial year 2024-25. Mr. Amit Shah will launch this scheme component while addressing the 'Sahkar Se Samriddhi' conference on the occasion of the 102nd International Day of Cooperatives in Gujarat's Gandhinagar on 6th July 2024 (Saturday). 

During the 'Sahkar se Samriddhi' conference, Shah will also initiate the payment for the same to three farmers at the event itself, the Ministry of Cooperation said in a statement. In addition to this, he will also inaugurate the launch of 'Bharat Organic Atta' produced by the National Cooperative Organics Limited (NCOL) during the event. The Minister will make the announcement during the event being organised by the Ministry of Cooperation on July 6 to mark the celebration of International Day of Cooperatives 2024. 

The International Day of Cooperatives is an annual celebration of the cooperative movement around the world. It has been observed on the first Saturday of July ever since 1923 by the International Cooperative Alliance (ICA). Incidentally, International Cooperative Day 2024 will be celebrated on July 6, which is also the 3rd Foundation Day of the Ministry of Cooperation. The theme for the 102nd International Cooperative Day is "Cooperatives Build a Better Future for All." 

Shah will also visit Changda Milk Producers Cooperative Society Limited in Banaskantha on Saturday. He will also review the transactions done by the milk producers via RuPay KCC at the micro-ATMs. Along with this, the Union Cooperation Minister will distribute Rupay KCC at a zero interest rate to women cooperative members in Banaskantha. This is a step further towards realising the vision of 'Sahkar se Samriddhi' given by Prime Minister Narendra Modi. "

1st Component of PM Khad Yojana [PM Kisan Khadya Yojana]

Central government has approved PM Khad Yojana 1st component as fertilizer subsidy scheme worth Rs. 24,420 crore for phosphatic and potassic (P&K) fertilizers. Under PM Kisan Khadya Yojana, govt. adds 3 new grades of P&K fertilizers to aid farmers and enhance the productivity of oilseeds and pulses. The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the Department of Fertilizers' proposal to set nutrient-based subsidy (NBS) rates for the 2024-25 kharif sowing season, which runs from April to September.

"Despite rising prices of fertilizers in the global market, we have decided to keep the prices the same as the last season," said minister Anurag Thakur at a press briefing after the Cabinet meeting. 

Note - Some websites are making claims that under PM Kisan Khad Yojana, govt. will transfer Rs. 1100 to 11000 in bank accounts of farmers. This is completely false. 

Fertilizer Subsidy Amount under PM Khad Yojana 2024 First Component

Central government has fixed the fertilizer subsidy rates for 2024 kharif season as given below:- 

• Nitrogen (N) - Rs. 47.02 per kg, 
• Phosphatic (P) - Rs. 28.72 per kg,
• Potassic (K) - Rs. 2.38 per kg,
• Sulphur (S) - Rs. 1.89 per kg.

The subsidy on phosphatic fertilisers has been increased to ₹28.72 per kg for the 2024 kharif season from ₹20.82 per kg in the 2023 rabi season. However, the subsidy on nitrogen (N), potassic (K) and Sulphur (S) has been kept unchanged for 2024 kharif season. 

DAP Based Fertilizers under PM Khadya Yojana

The subsidy on di-ammonium phosphate (DAP) will continue at ₹4,500 per tonne. As such, DAP-based fertilizers will be available for ₹1,350 per bag, while muriate of phosphate (MOP) fertilizers will be available for ₹1,670 a bag, and NPK (nitrogen, phosphorus and potassium) for ₹1,470 per bag.

For the 2023-24 kharif season, a subsidy of ₹38,000 crore was announced. The Union Budget for fiscal year 2024-25 (FY25) allocated ₹1.64 trillion for fertilizer subsidy, lower than the revised estimate of ₹1.88 trillion allotted for FY24.

Need for Fertilizer Subsidy in PM Khad Scheme 1st Component

Though India is moving toward gaining self-sufficiency in urea, it still depends on imports to meet its rock phosphate demand. Rock phosphate is the key raw material for DAP and NPK fertilizers. India is dependent on imports for muriate of potash and imports nearly 5 million tonnes of phosphate rock, 2.5 million tonnes of phosphoric acid and 3 million tonnes of DAP annually. In the case of diammonium phosphate, around 60% of the supply is imported. In addition, 25% of urea and 15% of NPK fertilizer requirements are met through imports.

Since its inception in 2010, the NBS scheme has played a pivotal role in ensuring farmers have access to essential nutrients at subsidized prices, now expanded to cover 25 grades of P&K fertilizers for both rabi and kharif seasons.

Soil Health Card to Prevent Overuse of Fertilizers and Pesticides

According to NABARD, there is a general tendency on the part of farmers to resort to overuse of fertilisers and pesticides expecting higher yields. It leads to unnecessary rise in input costs. To address this problem, the Centre has started the initiative of issuing soil health cards so that the farmer can balance the application of micro nutrients, other fertilisers and pesticides. Unlike domestic cooking gas (LPG-Pahal) and food, where beneficiaries are defined and cash/kind given directly to the beneficiary, fertiliser subsidy is universal in nature. The subsidy amount under PM Khad Yojana is paid to the manufacturer.

Harnessing the power of Jan Dhan, Aadhaar and Mobile (JAM), DBT in LPG-Pahal has led to saving of Rs. 71,301 crore between FY15 and FY20 while DBT in food has cumulatively saved the exchequer Rs 66,897 crore (largely DBT-in-kind as cash transfer not fully rolled out due to the National Food Security Act and concerns that it could lead to deprivation). The PoS system helped the Centre save Rs 10,000 crore in fertiliser subsidy by plugging leakages up to FY20, official data showed.

Benefits of DBT in Fertilizer Subsidy to Farmers

The important features and highlights of this direct benefit transfer of fertilizer subsidy are as follows:-

• Direct Transfer in Fertilizer Subsidy Scheme will enable farmers to purchase urea at subsidized price.
• CCEA approves implementation of Direct Benefit Transfer - DBT Scheme in fertilizer subsidy to properly disburse fertilizer subsidy directly to farmers.
• This direct benefit transfer in fertilizer subsidy scheme will reduce diversion and also plug the leakages.
• Govt. is planning for nationwide fertilizer DBT Scheme rollout to provide direct benefit transfer for fertilisers.
• DBT in fertilizers will ensure 100% payment to fertilizers companies for making DBT in fertilisers work under fertilizer DBT scheme.
• This continuation of Urea Subsidy Scheme will bring fertilizer subsidy reforms to ensure supply of fertilizer subsidy to farmers.

About Fertilizer Subsidy Division

The Fertilizer Subsidy Division (Previous name- Fertilizer Accounts Division) is headed by Joint Secretary who is assisted by a Director (FS). Fertilizer Subsidy Division deals with payment of cost of imported urea of OMIFCO/Canalizing agencies, recovery of Pool issue price of urea from Handling Agencies, Ocean freight payments to vessel owners, subsidy disbursement in respect of Imported Urea, Indigenous & Imported P & K fertilizers, SSP including freight subsidy, reimbursement of freight, insurance charges, custom duty, handling charges etc. The subsidy is paid on fertilizers sold for direct Agriculture uses.

Work Allocation of Fertilizer Subsidy Division

A. Fertilizer Subsidy (Imported) Division:-

• Imported P&K Fertilizers: – Release of ‘On Account’ 85%(without bank guarantee)/90%(with bank guarantee) subsidy payment and ‘Balance’ 15%/10% subsidy claims and Freight Subsidy claims under Nutrient Based Subsidy Scheme pertaining to pre DBT period. After the pan India roll out of DBT scheme, 100% subsidy on various fertilizer grades of P&K are released to the fertilizer companies on the basis of actual sales made by the retailers to the beneficiaries.
• Imported Urea: – Payment of 100% Import Cost of Urea, 98% Advance Claim and 2% Balance Claim of Import Cost of Pooled Urea and Settlement of 90% Advance and 10% Ocean Freight Claims.
• Recovery of Cost of Cargo, settlement of Debit note in r/o import of urea vessels, release of 5%, balance custom duty, and balance Inland Freight claim etc.
• Maintenance of Master Control Register (MCR)

B. Fertilizer Subsidy (Indigenous) Division:-

• Release of subsidy under DBT in respect of Indigenous P&K, DAP and SSP Under DBT system, 100% subsidy on various fertilizer grades are released to the fertilizer companies on the basis of actual sales made by the retailers to the beneficiaries.
• Indigenous P&K Fertilizers - Release of ‘On Account’ 85% (without bank guarantee) /90%(with bank guarantee) subsidy claims and ‘Balance’ 15%/10% subsidy claims and Freight Subsidy claims under Nutrient Based Subsidy Scheme.
• Indigenous SSP Fertilizers - Release of ‘On Account’ 85% (without bank guarantee)/90% (with bank guarantee) subsidy claims and ‘Balance’ 15%/10% subsidy claims and Freight Subsidy claims under Nutrient Based Subsidy Scheme.

C. Miscellaneous Works of Fertilizer Subsidy (Indigenous / Imported) Division:-

• Preparation of Budget Estimates/Revised Estimates/Outcome budget
• Preparation of Monthly Budget for release of subsidy during a particular month.
• Reconciliation of expenditure with PAO
• Internal/CAG Audit Paras/ATNs /Public Accounts Committee Reports/Standing Committee Reports.
• Parliament Questions/Assurances
• RTI Matters
• Court cases
• Submission of Weekly/Monthly/Quarterly/Half-yearly/Annual Reports
• Coordination with other Divisions of DoF and submission of various reports

Source / Reference link: https://www.livemint.com/news/india/cabinet-approves-rs-24-420-crore-fertilizer-subsidy-for-2024-kharif-season-11709202146079.html