Context: 

Recently the Union Cabinet approved Nutrient Based Subsidy (NBS) rates for KHARIF Season, 2024 on Phosphatic and Potassic (P&K) fertilisers and Inclusion of 3 new Fertiliser grades under NBS scheme.

What is Nutrient Based Subsidy?

• Farmers receive subsidised rates for fertilisers under the NBS programme.
• This programme covers fertilisers that are based on the nutrients N (Nitrogen), P (Phosphorus), K(Potash), and S (Sulphur).
• Subsidy on Micronutrients: Furthermore, fertilisers enhanced or fortified with micronutrients like zinc and molybdenum (Mo) are eligible for further subsidies.
• Every year, the government announces the P&K fertiliser subsidy.
• Basis of Calculation:It is calculated on a kilogramme basis and accounts for many factors such as the country’s inventory level, exchange rate, and P&K fertiliser prices domestically and internationally.
• To achieve the correct balance of NPK fertilisation, or (N:P: K= 4:2:1), NBS policy seeks to boost the usage of P&K fertilisers.
• Nodal Ministry: Ministry of Chemicals & Fertilizers.

Understanding Macronutrients, Micronutrients, and India’s Role as a Global Consumer

• Macronutrients: These are the elements that are needed in relatively greater quantities and include nitrogen (N), phosphorus (P), potassium (K), calcium, sulfur (S), and magnesium.
• Micronutrients: Smaller amounts of iron (Fe), zinc (Zn), copper, boron, manganese, molybdenum, chloride, and other elements are needed for crop plant growth and development.
• NPK (nitrogen, phosphorus, and potassium) fertilisers are the most widely used of the many kinds, and urea is the fertiliser that Indians use the most.
• India uses more than 55.0 million metric tonnes of fertiliser annually, making it the world’s second-largest fertiliser consumer.

Fertilizer Subsidies: Mechanisms, Beneficiaries, and the Shift to Direct Benefit Transfer

• Benefit to fertiliser firms: The farmer who pays MRPs below the rates set by the market is ultimately the one who benefits from the subsidy, even though it goes to fertiliser firms.
• Direct Benefit Transfer: The Direct-Benefit Transfer (DBT) scheme would only pay subsidies to the corporations following actual merchant sales to farmers.
• Role of merchants: Every merchant now has a point-of-sale (PoS) device connected to the e-Urvarak DBT portal run by the Department of Fertilisers.
• Using a Kisan credit card or Aadhar card: When purchasing fertilisers at a reduced price, a buyer must provide their Kisan Credit Card number or Aadhaar unique identity.
• E-urvarak platform: A corporation can only make a subsidy claim once the sale has been recorded on the e-Urvarak platform.

News Source: PIB