Fertilizer subsidy likely to stay at current level in FY26

Govt may stick to the allocation, as subsidy utilization in FY25 has followed anticipated trend

- Gireesh Chandra Prasad & Dhirendra Kumar

The Centre's fertilizer subsidy allocation for FY26 is likely to stay close to the current year's spending, as fluctuations in the prices of key plant nutrients remain within a relatively narrow range, two persons familiar with the development said.

For the current financial year, the government initially allocated ₹1.64 trillion and topped it up with another ₹6,594 crore in December, taking the total to ₹1.7 trillion.

For FY26, fertilizer subsidy, the second biggest subsidy offered by the Centre after food, is likely to be in this range as subsidy utilization in the current fiscal has broadly matched anticipated trend, said one of the persons quoted above.

Though the government is likely to start off the next fiscal with a similar subsidy allocation, there is an implicit commitment to meeting any unforeseen spike in requirement, said the person, who spoke on the condition of not being named.

Fertilizer subsidy accounts for about two-fifths of all Central subsidies projected at ₹4.28 trillion this fiscal. Of this, the Centre will spend ₹2 trillion on food subsidy and ₹11,925 crore on cooking gas.