India’s fertiliser subsidy needs reform beyond digital verification | Editorial Comment

In a year when the subsidy bill is expected to increase, the 37.56 per cent reported decline in fertiliser sales in select border districts during the 2026 kharif season has come as a relief, following the introduction of  digital verification of purchases. The decline was registered after linking purchases to farmer IDs, land records, and crop requirements through AgriStack and other digital platforms. The diversion of subsidised urea for industrial use and across borders has been a long-standing concern. The decline in offtake offers a fresh indication of the potential scale of leakage. The price differential is substantial: A 45-kg bag of urea is available to Indian farmers for about ₹265, against an estimated global landed price of ₹1,674 (September). Predictably, the fiscal implications are also significant. Allocation for fertiliser subsidies for 2026-27 stands at about ₹1.71 trillion, but expenditure could be substantially higher this year due to higher international prices owing to the West Asia crisis. Even for 2025-26, expenditure is estimated to have reached ₹2.11 trillion, around 26 per cent above the Budget Estimate of ₹1.68 trillion and 13.4 per cent higher than the Revised Estimate of ₹1.86 trillion.