Nutrient-Based Subsidy

The Union Cabinet, has approved the Nutrient Based Subsidy (NBS) rates for Phosphatic and Potassic (P&K) fertilizers for the Rabi 2025-26 season.

About the Nutrient-Based Subsidy (NBS) Scheme

• The Nutrient-Based Subsidy (NBS) Scheme is a fertilizer subsidy policy implemented by the Government of India to promote balanced fertilizer use and ensure affordable availability of fertilizers to farmers.
• It provides subsidies based on the nutrient content (Nitrogen, Phosphorus, Potassium, and Sulphur) rather than on specific fertilizer products.
• Implementation:
  • Launched: April 1, 2010
  • Implemented by: Department of Fertilizers, Ministry of Chemicals and Fertilizers
  • Mode: Fertilizer companies receive the subsidy directly, allowing them to sell fertilizers at a subsidized price to farmers.
• Objective:
  • To ensure farmers get fertilizers at affordable and stable prices.
  • To promote balanced use of nutrients (N:P:K = 4:2:1) for improved soil health and crop productivity.
  • To encourage efficiency and competition among fertilizer manufacturers by giving them pricing flexibility.
• Key Features
  • Coverage: Applies to Phosphatic and Potassic (P&K) fertilizers, including DAP (Di-Ammonium Phosphate) and NPKS (Nitrogen, Phosphorus, Potash, Sulphur) grades.
  • Subsidy Mechanism: A fixed subsidy per kilogram of nutrient (N, P, K, S) is provided; The subsidy rates are reviewed annually or bi-annually by the government.
  • Additional Subsidy for Fortified Fertilizers: Extra incentives are given for fertilizers fortified with secondary or micronutrients like zinc and boron to address soil deficiencies.
  • Decontrol of P&K Sector: Fertilizer companies are allowed to fix their own Maximum Retail Prices (MRP) based on market dynamics.
    • The government monitors MRPs to maintain affordability and prevent price escalation.
  • Flexibility: Encourages fertilizer firms to adjust production and imports according to market demand and profitability.
  • Balanced Fertilization: Promotes judicious and scientific use of fertilizers to maintain nutrient balance in soil and enhance long-term productivity.
• Significance:
  • Promotes Nutrient Balance: Helps achieve the ideal N:P:K ratio (4:2:1) essential for sustainable soil fertility.
  • Encourages Efficient Use: Shifts focus from product-based subsidy to nutrient-based, discouraging overuse of nitrogenous fertilizers like urea.
  • Ensures Affordability: Farmers continue to receive fertilizers at reasonable and stable prices despite global price fluctuations.

Impact of Long-Term Fertilizer Use (ICAR Findings)

• The Indian Council of Agricultural Research (ICAR) under the All India Coordinated Research Project on Long-Term Fertilizer Experiments assessed fertilizer impact across diverse soil types for over five decades.
• Findings
• • Balanced and judicious fertilizer use has no harmful effect on soil fertility.
  • Imbalanced use (especially excessive nitrogen) and low organic matter lead to multi-nutrient deficiencies and declining soil health.
  • Continuous use of only nitrogenous fertilizers (urea) resulted in severe nutrient deficiencies and crop yield decline.
  • Even NPK-balanced systems showed micro and secondary nutrient deficiencies over time.
  • In drip irrigation (fertigation), comparable yields can be achieved with less water and fertilizers, due to higher nutrient-use efficiency.
• ICAR Recommendations:
  • Promote soil test–based balanced fertilization.
  • Encourage Integrated Nutrient Management (INM) through the combined use of inorganic fertilizers and organic sources such as Farmyard manure, bio-fertilizers, and compost.

Promotion of Organic Fertilizers

• Market Development Assistance (MDA): Approved subsidy of ₹1,500 per MT for promoting organic fertilizers (manure) produced under the GOBARdhan initiative.
• Supported Programs: 
• • SATAT Scheme – Sustainable Alternative Towards Affordable Transportation (MoPNG).
  • Waste to Energy Programme – Ministry of New & Renewable Energy (MNRE).

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