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Fertilizer Subsidy in India
GS-3 Mains : Economy
Revision Notes
Examine the impact of over-consumption of urea and import dependence on the fertilizer subsidy scheme in India.
Fertilizer Subsidy Scheme
- Urea Subsidy Scheme
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- Statutory notified maximum retail price (MRP) for 45 kg bag of urea: ₹242
- Actual cost per bag: ₹3,000
- Government subsidizes the difference between delivered cost and market realization by urea manufacturer/importer.
- Nutrient-based Subsidy (NBS) Policy
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- Subsidy provided on per kg basis for Nitrogen (N), Phosphate (P), Potash (K), and Sulfur (S).
- Covers 25 grades of P&K fertilizers and 18 grades of NPKS complex fertilizers.
- MRP of P&K fertilizers determined by manufacturers/marketers.
Challenges
- Over-consumption of Urea:
- High N use compared to ideal ratio of 4:2:1 (N:P:K).
- Negative consequences for soil health.
- Import Dependence: Reliance on imports for key fertilizers like urea exposes India to price fluctuations.
- Leakage and Diversion: Subsidized fertilizers diverted to black market.
- Fiscal Burden: High cost of fertilizer subsidy strains government finances.
- Inequity: Benefits often accrue more to large farmers, exacerbating income inequality.
Government Measures
- PM PRANAM Scheme: Promotes alternate fertilizers and balanced use of chemical fertilizers.
- Neem-coated Urea: Increases nutrient efficiency, crop yield, and reduces diversion.
- Sulfur Coated Urea (Urea Gold): Addresses sulfur deficiency and reduces input costs.
- Nano Urea: Liquid fertilizer alternative to conventional urea.
Way Ahead
- Promote Balanced Nutrient Management:
- Awareness campaigns
- Training programs
- Extension services
- Information on soil health, crop needs, and overuse impacts
- Encourage Alternative Fertilizers:
- Biofertilizers
- Green manure
- Compost
- Reduce Import Dependence
- Improve Targeting of Subsidies
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