The Nutrient Based Subsidy Scheme for fertilizers (NBS) came into focus again in the domain of experts and is widely being discussed as CACP (i.e. Commission for Agricultural Costs and Prices) has recommended the Center to include the Urea for the Nutrient-based Subsidy (NBS) regime to address the problem of imbalance utilization of nutrients.
Urea being a controlled fertilizer has not yet been included in the NBS Scheme. Controlled fertilizers means their production, distribution, and pricing are regulated by the Government in India. It is the only fertilizer which fully regulated.
It has been a very critical policy decision of the Government of India in the Agriculture sector, especially for reforming the subsidy for fertilizers. In this article, a detailed analysis of NBS is furnished for better understanding.
Features of Nutrient Based Subsidy Scheme for Fertilizers.
Notably, the nutrients-based subsidy scheme is being implemented by the Department of Fertilizers, Ministry of Chemicals & Fertilisers since 2010.
An Inter Ministerial Committee (IMC) was comprised of the Secretary [fertilizers] as Chairman and Joint Secretary level officers of the DOE-Department of Expenditure, NITI Aayog, DARE-Department of Agricultural Research & Education and DAC&FW- Department of Agriculture, Cooperation & Farmers Welfare.
Before the start of a new financial year, the said Committee recommends per nutrient subsidy for ‘N’, ‘P’, ‘K’, and ‘S’ and based on this recommendations, the Government (Department of Fertilizers) decides the subsidy. An additional subsidy (per tonne) is also announced by The IMC for fortified subsidized fertilizers carrying secondary (other than ‘S’) & micro-nutrients.
Based on the application of manufacturers/ importers, new fertilizers are also considered and recommended by the Committee for the inclusion under the subsidy regime and it is to be appraised by the Indian Council for Agricultural Research (ICAR), for decision by the Government.
Primary nutrients, namely Nitrogen ‘N’, Phosphate ‘P’ and Potash ‘K’ and nutrient Sulphur ‘S’ contained in the following fertilisers are eligible for NBS.
- Di-ammonium Phosphate-(DAP, 18-46-0),
- Muriate of Potash (MOP),
- Mono Ammonium Phosphate (MAP, 11-52-0),
- Triple Super Phosphate (TSP, 0-46-0),
- Single Super Phosphate (SSP, 0-16-0-11),
- Ammonium Sulphate -AS – (Caprolactum grade by GSFC and FACT)
- and 16 grades of complex fertilizers.
Additional subsidy rates are Rs. 300 per MT and Rs. 500 per MT for Boron and Zinc respectively. The subsidized P&K fertilizers which are covered under NBS Policy and are also fortified/coated with Boron and Zinc will be eligible for subsidy. An additional subsidy will be given per tone for such fortified/coated grades of fertilizers to encourage their application along with primary nutrients. NBS are decided and announced annually on each nutrient namely, ‘N’, ‘P’, ‘K’ and ‘S’ by the Government.
A benefit of a certain amount ( INR 100 for FY 2021-22) per bag of fertilizer is announced by the cabinet committee based on the recommendation of CACP annually and given on each NPK (10-26-26), and NPK (12-32-16).
A benefit of a certain amount ( INR 438 for FY 2021-22) is announced by the cabinet committee based on the recommendation of CACP annually and given per bag on Di-ammonium Phosphate (DAP) fertilizers.
All P&K Fertilisers were made available smoothly to the farmers during the season 2021-22.
Monitoring of distribution and movement of fertilizers under Nutrient Based Subsidy Scheme for Fertilizers.
A robust online monitoring system has been developed for monitoring the movement and distribution of fertilizers along with fertilizer inputs and production by indigenous units and import of finished fertilizers. The monitoring system is named as “Integrated Fertilizer Monitoring System (iFMS)” (erstwhile FMS and mFMS).
Apart from the NBS, for the the decontrolled fertilizers, the freight for the movement & distribution by rail and road is being provided to enable wider availability of fertilizers in the country.
Objectives of Nutrient Based Subsidy Scheme for Fertilizers:
To minimize the shortcoming of the erstwhile concessional fertiliser scheme, based on the recommendation of a Group of Ministers (GoM), Nutrient Based Subsidy (NBS) for Phosphatic & Potassic fertilisers came into existence with the following objectives:
- Ensuring the Nation’s food security for the nation, as food security for any country is of utmost importance to build its national vision of development.
- Improving the agricultural productivity. means improving produce per hectare yield of crops.
- Ensuring the balanced application of fertilizers.
- It helps farmers in ensuring the availability of essential nutrients at subsidized prices.
How transparency is maintained for the Nutrient Based Subsidy Scheme for Fertilizers?
The fertilizer companies are required to print the Maximum Retail Price (MRP) and applicable subsidy on the fertilizer bags. If anyone sells above the printed MRP would be punishable under the EC Act.
To examine the reasonability for MRPs of P&K fertilizers, from time to time, the companies are asked to submit the certified cost data as per directions of DOF and the requirement. The companies have to report MRPs of P&K fertilizers to DOF regularly.
As inputs for manufacturing customized & mixture fertilizers for agricultural purposes, manufacturers of the same are eligible for subsidized fertilizers from the manufacturers or importers after their receipt in the regions (districts) and no separate subsidy on the sale of customized fertilizers or mixture fertilizers.
Significance of Nutrient Based Subsidy Scheme for Fertilizers.
The Nutrient Based Subsidy (NBS) Scheme for fertilizers has significantly impacted the agricultural sector of India and has been a crucial initiative by the Government of India for improving agri productivity.
Balanced Fertilizer Application:
The NBS Scheme helps the stack holder in promoting the balanced use of fertilizers by providing subsidies based on the nutrient content such as nitrogen, phosphorus, and potassium) rather than a flat subsidy on the product. This encourages farmers to use fertilizers that contain the right mix of nutrients, thereby improving soil health and crop productivity.
Improved Soil Health:
This helps the farmers to use fertilizers with a balanced nutrient composition and the said scheme helps in maintaining soil fertility and reducing nutrient imbalances. Subsequently, it leads to sustainable agriculture practices and improves agricultural productivity over the long term.
Cost-Efficiency:
The scheme helps the farmer to make an informed choice about the quantity and type of fertilizers to use. This not only enhances crop yields per hectare but also reduces the cost of cultivation, as farmers are not applying unnecessary or excessive fertilizers.
Reduction in Subsidy Burden:
With the help of this Scheme, the government manages to regulate subsidy expenditure more efficiently, and the government is subsidizing only essential nutrients, hence it will reduce the subsidy burden of the government of India. It is pertinent to note that the high subsidy burden as revenue expenditure is toward fertilizers. It can be understood through the below given chart.
Subsidy chart: from
Environmental Conservation:
If fertilizers are used in a balanced form and based on the nutrients required for the soil, such practice reduces the risk of nutrient runoff into water bodies. Runoff of nutrients can cause water pollution and harm aquatic ecosystems. Hence, NBS indirectly helps in environmental conservation goals by mitigating the adverse effects of excessive fertilizer use.
Increased Agricultural Productivity:
When nutrients are utilized right proportion through balanced fertilization by farmers, it leads to improved crop yields and quality.
Promotion of Customized Fertilizer Blends:
The NBS Scheme encourages importers and manufacturers to produce a customized fertilizer blend tailored to specific crop and soil requirements. This flexibility is beneficial for different regions and crop varieties across the country.
Subsidy trends till 2022 for fertilisers under Nutrient Based Subsidy Scheme.
Nutrient Based Subsidy Scheme for Fertilisers, Per kg rate of rate per kg from 2016 to 2022 trend
| NBS rates (Rs. per Kg) | ||||||||
| Nutrients | 2016-17 | 2017-18 | 2018-19 | 2019-20 | 2020-21 | 2021-22 | 2022 (kharif) | 2022 (Rabi) |
| ‘N’ (Nitrogen) | 15.854 | 18.989 | 18.901 | 18.901 | 18.789 | 18.789 | 91.96 | 98.02 |
| ‘P’ (Phosphate) | 13.241 | 11.997 | 15.216 | 15.216 | 14.888 | 45.323 | 72.74 | 66.93 |
| ‘K’ (Potash) | 15.47 | 12.395 | 11.124 | 11.124 | 10.116 | 10.116 | 25.31 | 23.65 |
| ‘S’ (Sulphur) | 2.044 | 2.24 | 2.722 | 3.562 | 2.374 | 2.374 | 6.94 | 6.12 |
FAQs for Nutrient Based Subsidy Scheme for Fertilizers:
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How does nutrient based subsidy work?
Under NBS scheme, an amount, as subsidy, based on the nutrients (N,P,K,S) in the fertilizers is given to the supplier/manufactures/imports. This amount is incorporated in the MRP of the fertilisers. Hence it is indirectly passed on to the farmers.
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What is the latest news about nutrient based subsidy?
Revision of subsidy rate proposed by Department of Fertilizers for N’, Phosphate ‘P’ and Potash ‘K’ and nutrient Sulphur ‘S’ have been approved by Government of India for Rabi Season 2022-23
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What is included in nutrient based subsidy?
Primary nutrients, namely Nitrogen ‘N’, Phosphate ‘P’ and Potash ‘K’ and nutrient Sulphur ‘S’ contained in the following fertilisers are eligible for NBS:
1. Di-ammonium Phosphate-(DAP, 18-46-0),
2. Muriate of Potash (MOP),
3. Mono Ammonium Phosphate (MAP, 11-52-0),
4. Triple Super Phosphate (TSP, 0-46-0),
5. Single Super Phosphate (SSP, 0-16-0-11),
6. Ammonium Sulphate -AS – (Caprolactum grade by GSFC and FACT),
7. And 16 grades of complex fertilizers.
The subsidized P&K fertilizers which are covered under NBS Policy and are also fortified/coated with Boron and Zinc will be eligible for subsidy -
Is fertilizer subsidy direct or indirect?
As it is passed on to the farmers indirectly through the suppliers or manufacturers or importers. However the, subsidy for irrigation and powers are provided to the farmers directly in monetary forms.
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What are the primary nutrients and secondary nutrients?
Macronutrients include both primary and secondary nutrients that are consumed extensively by plants. Further, if we talk about the primary nutrients. They are (NPK- Nitrogen, Phosphorus, and Potassium) and the secondary nutrients are essential- (Ca, Mg &S) – Calcium, Magnesium, and Sulfur.
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What are macro and micro nutrients for plants?
Macro and Micro nutrients are as follows:
Macronutrients: (Primary and Secondary Nutrients)- NPK & Ca,Mg,S etc.
Micronutrients: molybdenum, Zinc and Boron etc.