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The approval comes against the backdrop of the government’s nutrient-based subsidy (NBS) framework, under which phosphatic and potassic fertilisers are supplied to farmers at subsidised prices.

Under the scheme, the Centre fixes subsidy rates for different nutrients for each cropping season, considering prevailing domestic and international prices of fertilisers and their inputs. The subsidy is paid to manufacturers and importers to support the availability of fertilisers at affordable prices. For the preceding rabi season of 2025-26, the government had approved a subsidy requirement of approximately Rs 37,952 crore.

The Cabinet subsequently cleared about Rs 41,534 crore for the kharif 2026 season. The government’s fertiliser subsidy programme covers key agricultural inputs used in cultivating crops, including wheat, pulses and oilseeds.

In another decision, the Cabinet approved a Rs 5,000-crore credit guarantee fund under the Pradhan Mantri MUDRA Yojana. Launched in April 2015, the scheme facilitates institutional credit for small businesses and microenterprises through banks, non-banking financial companies and other eligible lending institutions. The existing Credit Guarantee Fund for Micro Units, administered by the National Credit Guarantee Trustee Company, provides protection to eligible lenders against defaults on covered microenterprise loans. The government’s credit guarantee mechanism is intended to support collateral-free lending to eligible small borrowers.