NUTRIENT BASED SUBSIDY (Syllabus: GS Paper 3 – Economy)

• Context: Recently, the Union cabinet approved a subsidy of ₹22,303 crore for phosphatic and potassic fertilizers to support the ongoing rabi season, which extends until the end of March.

Key highlights

• The cabinet also approved fresh rates under the nutrient-based subsidy (NBS) scheme for NPK (nitrogen, phosphorus, potassium) fertilizers.
• Rabi crops are sown in winter and harvested in spring. Wheat, barley, mustard, chana (gram), masur (lentil), peas, potato, tomato, beet, cabbage, garlic, onion, cumin, coriander, linseed, sunflower and cauliflower.

Nutrient Based Subsidy Scheme

• About: Under the NBS policy, the government annually declares a fixed subsidy rate for key nutrients, including Nitrogen (N), Phosphate (P), Potash (K), and Sulphur (S).
• Implemented by: Since 2010 by the Department of Fertilizers
• Nodal Ministry: Ministry of Chemicals & Fertilizers

o Fertilizer manufacturers and importers provide farmers with subsidized prices for Urea and 25 P&K fertilizer grades as part of the government's initiative.

• Aim: The NBS policy strives to enhance the utilization of P&K fertilizers to attain the desired NPK fertilization equilibrium, with a ratio of 4:2:1 for Nitrogen (N), Phosphate (P), and Potash (K).

Benefits 

• It helps farmers in ensuring availability of essential nutrients at subsidized prices.
• It rationalizes the subsidy on P&K fertilizers, ensuring effective and efficient utilization of government resources.