{"id":37878,"date":"2023-10-26T06:31:10","date_gmt":"2023-10-26T01:01:10","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=37878"},"modified":"2025-04-23T02:31:57","modified_gmt":"2025-04-22T21:01:57","slug":"subsidy-mechanismfertilizers","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/subsidy-mechanismfertilizers\/","title":{"rendered":"Subsidy Mechanism for Fertilizers in India"},"content":{"rendered":"<h2>What\u2019s in Today\u2019s Article?<\/h2>\n<ul>\n<li>Why in the News?<\/li>\n<li>About Fertilizers<\/li>\n<li>Macro &amp; Micro Elements in Fertilizers<\/li>\n<li>About Fertilizer Subsidy<\/li>\n<li>How is the Subsidy Paid &amp; Who gets it?<\/li>\n<li>Government Schemes\/Initiatives for Fertilizers<\/li>\n<li>Suggestions<\/li>\n<li>News Summary<\/li>\n<\/ul>\n<h2>Why in News?<\/h2>\n<ul>\n<li>The Union Cabinet approved a Rs 22,303 crore subsidy on P&amp;K fertilizers for the current Rabi season to ensure farmers continue to get soil nutrients at reasonable rates despite high global prices.<\/li>\n<\/ul>\n<h2>Fertilizer Subsidy<\/h2>\n<ul>\n<li>Farmers buy fertilisers at MRPs (maximum retail price) below their normal supply-and-demand-based market rates or what it costs to produce\/import them.\n<ul>\n<li>The MRP of neem-coated urea, for instance, is fixed by the government at Rs 5,922.22 per tonne.<\/li>\n<li>Whereas its average cost-plus price payable to domestic manufacturers and importers comes to around Rs 17,000 and Rs 23,000 per tonne, respectively.<\/li>\n<\/ul>\n<\/li>\n<li>The difference, which varies according to plant-wise production cost and import price, is footed by the Centre as subsidy.<\/li>\n<li>The MRPs of non-urea fertilisers are decontrolled or fixed by the companies.<\/li>\n<li>However, the Centre pays a flat per-tonne subsidy on these nutrients to ensure reasonable prices.<\/li>\n<\/ul>\n<h2>How is the Subsidy Paid &amp; Who gets it?<\/h2>\n<ul>\n<li>The subsidy goes to fertiliser companies, although its ultimate beneficiary is the farmer who pays MRPs less than the market-determined rates.<\/li>\n<li>Under the Direct-Benefit Transfer (DBT) system, subsidy payment to the companies would happen only after actual sales to farmers by retailers.<\/li>\n<li>Each retailer now has a point-of-sale (PoS) machine linked to the Department of Fertilisers\u2019 e-Urvarak DBT portal.<\/li>\n<li>Anybody buying subsidised fertilisers is required to furnish his\/her Aadhaar unique identity or Kisan Credit Card number.<\/li>\n<li>Only upon the sale getting registered on the e-Urvarak platform can a company claim subsidy.<\/li>\n<\/ul>\n<h2>Government Schemes\/Initiatives<\/h2>\n<ul>\n<li>New Investment Policy 2012:\n<ul>\n<li>The Government had notified New Investment Policy \u2013 2012 in January, 2013 with the main objective to facilitate fresh investment, make India self-reliant and reduce import dependency in urea sector.<\/li>\n<\/ul>\n<\/li>\n<li>Neem-coated Urea:\n<ul>\n<li>Urea that is coated with neem tree seed oil is called neem-coated urea.<\/li>\n<li>The Department of Fertilizers has made it mandatory for all the domestic producers to produce 100% urea as Neem Coated Urea (NCU).<\/li>\n<li>Benefits of NCU include:\n<ul>\n<li>Slow down the process of nitrification of urea<\/li>\n<li>Enhance the yield<\/li>\n<li>Decrease urea requirement, hence save money<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li>New Urea Policy 2015:\n<ul>\n<li>The New Urea Policy was released in May 2015.<\/li>\n<li>The Policy seeks to:\n<ul>\n<li>Increase indigenous urea production,<\/li>\n<li>Promote energy efficiency in urea production, and<\/li>\n<li>Reduce subsidy burden on the Central government.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li>Nutrient Based Subsidy Scheme:\n<ul>\n<li>Nutrient Based Subsidy Programme for fertilizers was initiated in 2010.<\/li>\n<li>Under the scheme, a fixed rate of subsidy (in Rs per kg basis) is announced for nutrients namely Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S) by the government on an annual basis.<\/li>\n<li>It aims at ensuring the balanced use of fertilizers, improving agricultural productivity, promoting the growth of the indigenous fertilizers industry and also reducing the burden of Subsidy.<\/li>\n<\/ul>\n<\/li>\n<li>Gas Pooling in Fertilizers:\n<ul>\n<li>Currently, there are 30 urea producing units in the country, out of which 27 units are gas based and 3 units are Naphtha based.<\/li>\n<li>Gas Pooling mechanism was introduced by the Government in 2015.<\/li>\n<li>It is intended to supply gas at uniform delivered price to all fertilizer plants on the gas grid for production of urea through a pooling mechanism.<\/li>\n<\/ul>\n<\/li>\n<li>One Nation One Fertiliser Scheme\n<ul>\n<li>Under the scheme, all fertiliser companies, State Trading Entities and Fertiliser Marketing Entities will be required to use a single \u201cBharat\u201d brand for fertilisers and logo under the Pradhanmantri Bhartiya JanurvarakPariyojna (PMBJP).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Suggestions<\/h2>\n<ul>\n<li>The Central government should consider paying farmers a flat per-acre cash subsidy that they can use to purchase any fertiliser.<\/li>\n<li>The amount could vary, depending on the number of crops grown and whether the land is irrigated or not.<\/li>\n<li>This is a <u>sustainable solution to prevent diversion and also encourage judicious application of fertilisers, with the right nutrient (macro and micro) combination based on proper soil testing and crop-specific requirements<\/u>.<\/li>\n<\/ul>\n<h2>News Summary<\/h2>\n<p><img decoding=\"async\" src=\"https:\/\/vajiramandravi.s3.us-east-1.amazonaws.com\/media\/editor_images\/2023\/10\/26\/12\/55\/59\/653a14876ea81005d834afc6_OI.PNG\" alt=\"\" \/><\/p>\n<ul>\n<li>The Union cabinet approved Rs 22,303 crore subsidy for nutrient-based phosphatic and potassic (P&amp;K) fertilisers for the current Rabi season starting October 1.<\/li>\n<li>With global prices cooling down, the proposed outgo towards fertiliser subsidy will be 57% lower than the last Rabi season and 31% less than the Kharif season, which ended in September.<\/li>\n<li>The Centre\u2019s fertiliser subsidy had shot up to a record of more than Rs 2.5 lakh crore last year following the spike in international prices in the wake of the war in Ukraine.<\/li>\n<li>For the current financial year, the government has allocated Rs 1.75 lakh crore subsidy for 2023-24.<\/li>\n<\/ul>\n<hr \/>\n<h3>Q1) What is the meaning of Minimum Support Price?<\/h3>\n<p>MSP is a form of government intervention to insure the farmers against a steep decline in the prices of their goods and to help them prevent losses. The government of India sets the MSP twice a year for 24 commodities.<\/p>\n<h3>Q2) What is meant by Zero Tillage Farming?<\/h3>\n<p>Zero tillage refers to the arable land on which no tillage is applied between harvest and sowing. Zero tillage is a minimum tillage practice in which the crop is sown directly into soil not tilled since the harvest of the previous crop.<\/p>\n<hr \/>\n<p><strong>Source:<\/strong> <a href=\"https:\/\/indianexpress.com\/article\/india\/cabinet-approves-rs-22303-cr-subsidy-on-pk-fertilisers-for-rabi-season-8998871\/\" target=\"_blank\" rel=\"nofollow noopener\"><u>Cabinet approves Rs 22,303 cr subsidy on P&amp;K fertilisers for Rabi crop season<\/u><\/a> | <a href=\"https:\/\/timesofindia.indiatimes.com\/india\/rs-22000-crore-subsidy-bill-for-rabi-crop-gets-nod\/articleshow\/104708138.cms?from=mdr\" target=\"_blank\" rel=\"nofollow noopener\"><u>ToI\u00a0<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A fertilizer is a natural\/artificial substance that improves growth and productiveness of plants.<\/p>\n","protected":false},"author":5,"featured_media":37879,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-37878","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/37878","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=37878"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/37878\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/37879"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=37878"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=37878"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=37878"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}