The above is article from Indian Express. The article is good | ECONOMY by VIVEK SINGH

The above is article from Indian Express. The article is good but there is too much data and students may get lost in the data while missing the crux. So, let me simplify it.

1) In India the price of UREA is regulated/fixed by the Govt (Rs. 5.37/kg) while the prices of other fertilizers like DAP (Diammonium Phosphate), MoP (Muriate of Potash) and other fertilizers have been deregulated i.e. prices are decided by market forces.

2) Govt. asks Urea companies to sell urea at Rs. 5.37/kg to farmers but the international market price is quite high (Rs. 18/kg....). If the cost of production of Urea increases (because of increase in Nitrogen price) then also farmers get Urea at a fixed rate of Rs. 5.37/kg and GOVT. incurs the burden of higher cost in the form of higher subsidies. So, in case of UREA, price is fixed for the farmers but Govt. subsidy increases/decreases depending on increase in cost of production of Urea (which mostly depends on gas as inputs).
BUT this is not the case of other fertilizers. In case of DAP, MoP, SSP... Govt has fixed the subsidy amount and deregulated the prices. So, if the cost of production of these fertilizers increases because of increase in inputs like P and K then the the fertilizer companies increase the price for the farmers as the subsidy is fixed by the Govt. Generally Govt. announces the subsidy on DAP, MoP, SSP.. every year at the start of financial year which remains fixed round the year. And next year again it announces which does not change much with the previous years. This subsidy is announced by the Govt. in the form of per KG of nutrient present in the fertilizers of DAP, MoP, SSP etc. So, based on how much which nutrient (like N, P, K, S ...) is present in these fertilizers... companies get a fixed subsidy on per KG of DAP/MoP/SSP produced.

3) So, this year also Govt. announced subsidies on DAP/MoP/SSP in April 2021 which should have been applicable till 31st March 2022. BUT because of the considerable rise in international prices of oil and gas recently... the Fertilizer companies increased the price of DAP/MoP/SSP. For example IFFCO increased the price of DAP per bag from Rs. 1200 to 1900. So, since in April ... elections were there in 5 States... so, Govt. requested these companies to not increase till the elections ... And for some companies their old stock was there which they were selling at earlier prices. But now almost all the companies selling these fertilizers have increased the prices. Ideally Govt. should not have intervened and it would have let the prices increased which would have increased the cost for farmers. But may be due to Covid and the farmers protest... Govt. intervened and have increased the subsidy which has resulted in DAP/MoP/SSP prices being sold at the previous rates.

Do you know why UREA price is fixed so low and DAP/MoP/SSP... prices have been deregulated???
Because it is politics. Indian farmers consume/purchase more urea (80% is urea consumption) and if the prices will be deregulated/freed then farmers will get impacted and the Govt. which will do it will loose the elections. Ideally it should deregulate Urea also and Urea subsidy should also be brought under Nutrient Based Subsidy (NBS) just like DAP/MoP/SSP.... where prices are decided by market and subsidy of Govt. is fixed.

Govt. rather than increasing the subsidy of DAP/MoP/SSP.... what else it could have done??
It could have transferred more cash under PM-KISAN to cushion against this burden.

Actually increasing subsidy one time will lead to more such demands whenever there will be an increase in prices and the purpose of NBS reform will get lost.
I personally do not support such moves, it hinders long term prospect of Indian Agriculture. If it has been done because of Covid second wave which has now hit Indian rural sector also then it is fine but if there is any other intention/reason then its not good.