PM-AASHA scheme extended; Rs 24.4K cr fertiliser subsidy approved

New Delhi: In a significant move aimed at supporting India’s agricultural sector, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the continuation of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) with a financial outlay of Rs 35,000 crore. This scheme is designed to provide better prices to farmers and control the price volatility of essential commodities for consumers.

It also approved Rs 24,474.53 crore subsidy on phosphatic and potassic (P&K) fertilisers for the rabi season of 2024-25.

The PM-AASHA scheme will span the 15th Finance Commission Cycle up to 2025-26, with the total financial commitment set at Rs 35,000 crore.

According to an official statement, the scheme’s objective is twofold: to ensure remunerative prices for farmers and to stabilise prices for consumers.

Prime Minister Modi highlighted the significance of this initiative in a post on X, stating: “We are constantly taking big steps for the welfare of farmers. In this series, today our government has approved the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan. This will not only help farmers get a profitable price for their crops but will also benefit consumers.”The PM-AASHA scheme integrates several existing schemes to enhance efficiency. It combines the Price Support Scheme (PSS) and Price Stabilization Fund (PSF), now incorporating the Price Deficit Payment Scheme (POPS) and Market Intervention Scheme (MIS). This unified approach aims to streamline support for farmers and manage price fluctuations more effectively.Under the revised PM-AASHA framework, the PSS will facilitate the procurement of notified pulses, oilseeds, and copra at Minimum Support Price (MSP), with a target to procure 25 per cent of national production starting from the 2024-25 season. Notably, there will be a 100 per cent procurement of tur, urad, and masur during this period.

The central government has also renewed and increased the existing procurement guarantee to Rs 45,000 crore, enhancing the capacity to buy pulses, oilseeds, and copra whenever market prices fall below MSP. This move is intended to encourage higher cultivation of these crops, contributing to self-sufficiency and reducing reliance on imports.

In addition, the extension of the PSF scheme aims to protect consumers from severe price volatility in agri-horticultural commodities by maintaining a strategic buffer stock of pulses and onions. This scheme is expected to curb hoarding and speculative practices that lead to price spikes.

The PM-AASHA also includes an expansion of the Price Deficit Payment Scheme (PDPS) for oilseeds, raising coverage from 25 per cent to 40 per cent of state production and extending the implementation period from three to four months. The central government will bear the cost of compensating the difference between MSP and sale/modal prices, capped at 15 per cent of MSP.Further, the MIS component of PM-AASHA has been updated to cover 25 per cent of production for perishable horticulture crops and introduces the option of direct differential payments to farmers’ accounts, simplifying the procurement process.

To address regional price disparities for tomato, onion, and potato (TOP) crops, the government has decided to subsidise transportation and storage costs through nodal agencies like NAFED and NCCF. This initiative aims to balance prices between producing and consuming states during peak harvesting periods.

In a separate but complementary decision, the Cabinet has also approved a subsidy of Rs 24,474.53 crore for phosphatic and potassic (P&K) fertilisers for the rabi season of 2024-25. This subsidy is intended to ensure that essential crop nutrients are available to farmers at affordable rates.

Prime Minister Modi emphasised the importance of this subsidy, noting that it will help reduce cultivation costs and support farmers. The Nutrient Based Subsidy (NBS) scheme, which governs the subsidy for P&K fertilisers, will see a budgetary requirement of approximately Rs 24,475.53 crore for the upcoming rabi season, covering from October 2024 to March 2025.