Source: BS
Context
Fertiliser companies have urged the Centre to increase Nutrient Based Subsidy (NBS) rates for Kharif 2026. The demand comes after the West Asia conflict sharply increased the cost of imported raw materials like ammonia and sulphur.
Why is the Industry Demanding a Higher Subsidy?
- Raw material prices have risen significantly.
- Retail fertiliser prices cannot be increased beyond a limit.
- Without higher subsidies, companies may reduce production of NP and NPKS fertilisers.
What is the Nutrient Based Subsidy (NBS) Scheme?
- Launched on 1 April 2010.
- Applicable to Phosphatic (P) and Potassic (K) fertilisers.
- Government provides subsidy based on the nutrient content of Nitrogen (N), Phosphorus (P), Potassium (K), and Sulphur (S).
- Subsidy is paid directly to fertiliser companies.
Key Issues
- NBS rates are revised only twice a year, making it difficult to respond to sudden global price shocks.
- Urea is not covered under NBS and remains heavily subsidised, leading to excessive nitrogen use.
- India depends heavily on imports of DAP, MOP, ammonia, sulphur, and rock phosphate, making it vulnerable to global disruptions.
Government Initiatives
- PM-PRANAM: Encourages states to reduce chemical fertiliser use.
- Nano Urea & Nano DAP: Aim to reduce fertiliser imports.
- One Nation One Fertiliser (Bharat Brand): Common branding for subsidised fertilisers.
- Soil Health Card Scheme: Promotes balanced nutrient application.
Key Terms
- NBS: Subsidy based on nutrient content (N, P, K, S).
- DAP: Fertiliser containing 18% Nitrogen and 46% Phosphorus.
- MOP: Main potash fertiliser; India imports 100% of its requirement.
- Balanced Fertilisation: Recommended N:P:K ratio is 4:2:1.
- Landed Cost: Total import cost, including freight, insurance, and duties.
