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Fertilisers Update - Subsidy Budget May Fall Short By Rs 35,000 Crore On High Input Costs: CareEdge

We believe already enhanced fertiliser subsidy budget of Rs 2,15,000 crore for FY23 is likely to fall short by around Rs 35k cr

<div class="paragraphs"><p>A tractor spraying fertiliser in an open field. (Photo: James-Baltz/ Unsplash)</p></div>
A tractor spraying fertiliser in an open field. (Photo: James-Baltz/ Unsplash)

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CareEdge Research Report

In this report, we has analysed the impact of elevated raw material and gas prices along-with rupee’s depreciation on the subsidy budget for the fertilizer sector.

  • We believe the already enhanced fertiliser subsidy budget of ~Rs 2,15,000 crore for FY23 is likely to fall short by around Rs 35,000 crore.

  • Prices of a majority of the key raw materials for the production of fertilisers remain elevated in H1 FY23 on the back of the Russia-Ukraine war.

  • Prices of domestic natural gas allocated to the fertiliser sector remained high in H1 FY23 and the same further increased by nearly 40% with-effect-from October 01, 2022, for H2 FY23.

  • There has nearly been a 7% depreciation of the Indian rupee vis-a-vis the U.S. dollar in H1 FY23, which increases the subsidy requirement since a majority of key raw materials for fertilisers are imported.

Click on the attachment to read the full report:

CareEdge Fertilizers Subsidy.pdf

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