Nutrient Based Subsidy Scheme, Objectives, Features, Provisions

The Nutrient Based Subsidy Scheme has been launched to provide subsidies for all non-urea based fertilizers. The scheme will promote soil fertilization in a balanced way that increases agricultural output as well as improve farm returns. A fixed level of subsidy is provided to phosphatic and potassic fertilisers and not urea, depending on the nutrient content requirements. Manufacturers and marketers are given a free pass to set the MRP for these fertilizers, under the plan. 

Nutrient Based Subsidy Scheme Overview

 The Nutrient Based Subsidy Scheme was launched in April 1, 2010. The scheme covers 22 deregulated fertilizer grades including DAP, MAP, TSP, DAP Lite, MOP, SSP, Ammonium Sulphate and 15 others. These nutrients are provided to farmers at subsidised rates determined by the nutrients N,P and K. The Fertilizer Control order also provides subsidies for secondary nutrients like zinc and boron. The subsidies are determined on an annual basis for enterprises, considering the nutrient content of fertilizers. 

Nutrient Based Subsidy Scheme Objectives

Nutrient Based Subsidy aims to provide balanced fertilization, affordable prices for nutrients available for farmers and improved nutrient efficiency. The scheme will reduce the subsidy burden on government and support a sustainable growth for agriculture sector. 

• Balanced soil fertilization would result in improved agricultural productivity and better farmer returns. 
• The NCS Scheme will make sufficient P&K fertilizer supply for farmers at statutory fixed cost to improve agricultural growth and balanced nutrient application. 
• The scheme will reduce the subsidy load, encourage growth of local fertilizer sector and improve agricultural productivity. 

Nutrient Based Subsidy Scheme Features

Nutrient Based Subsidy Scheme allows the market to determine retail prices and encourages efficient fertilizer use and fosters competition among manufacturers. Features of nutrient based subsidy includes: 

• Subsidies linked to nutrient content of fertilizers and promotion of customized fertilizers tailored to specific crop and soil requirements. 
• The scheme is implemented by the Ministry of Chemicals and Fertilizers Department. 
• Farmers will be given a proper supply of P and K fertilizers at regulated prices. 
• Urea is a regulated fertilizer in India and sold legally in a notified uniform retail price. 
• The scheme allows phosphoric and potassium fertilizer manufacturers and importers the liberty to set their MRP.
• The MRP is determined based on domestic and international P&K fertilizer costs and currency exchange rates.

Nutrient Based Subsidy Scheme Provisions

The NBS Scheme has the following provisions:

• Subsidy Allocation: The Nutrient-Based Subsidy (NBS) Scheme provides fixed subsidies to fertilizer companies based on the nutrient content of fertilizers such as nitrogen, phosphorus, potash, and sulfur.
• Direct Subsidy Transfer: Subsidies are transferred directly to manufacturers, enabling them to sell fertilizers to farmers at market-determined prices, ensuring affordability and availability.
• Target Beneficiaries: Farmers cultivating notified crops in specified areas are eligible for the scheme.
• Subsidy Determination: The government determines subsidy rates based on nutrient content and adjusts them periodically according to market conditions.
• Quality Assurance: Fertilizers sold under the scheme must meet the quality standards specified by the Bureau of Indian Standards (BIS).
• Implementation Monitoring: The government monitors the scheme to ensure that subsidies reach the intended beneficiaries effectively.
• Information Dissemination: Farmers are informed about the scheme through various channels, including print and electronic media, agricultural extension officers, and mobile apps.
• Awareness Campaigns: Campaigns are conducted to educate farmers on balanced fertilizer use, soil health management, and crop diversification.

Nutrient Based Subsidy Scheme Importance

The Nutrient-Based Subsidy (NBS) Scheme supports sustainable agriculture by promoting balanced fertilizer use, enhancing efficiency, and reducing fiscal strain.

• Balanced Fertilization: Encourages the use of a nutrient-rich mix to improve soil health and crop productivity.
• Reduced Fiscal Burden: Links subsidies to nutrient content, optimizing government expenditure.
• Nutrient Use Efficiency: Ensures precise fertilizer application, reducing wastage and environmental impact.
• Market-Driven Competition: Fosters competitive pricing among manufacturers, enhancing product quality and service.
• Agricultural Sustainability: Supports long-term soil fertility and eco-friendly farming practices.
• Direct Benefit Transfer: Simplifies subsidy disbursal to manufacturers, ensuring timely fertilizer availability.
• Customized Fertilizers: Promotes region- and crop-specific fertilizer formulations for better yields. 

Nutrient Based Subsidy Scheme FAQs

Q1. What is the nutrient-based subsidy scheme?
Ans. It is a government scheme providing fertilizer subsidies based on their nutrient content to promote balanced fertilization.

Q2. What is the fertilizer subsidy scheme in UPSC?
Ans. It refers to schemes like NBS that aim to ensure affordable fertilizers for farmers while promoting soil health and sustainable agriculture.

Q3. Which union ministry is associated with the nutrient-based subsidy (NBS) scheme?
Ans. The Ministry of Chemicals and Fertilizers.

Q4. What is the nutrient-based subsidy rate for 2024?
Ans. The government periodically announces rates; please check the latest updates for 2024.

Q5. What is the difference between nutrient-based subsidy and urea subsidy?
Ans. NBS provides subsidies based on the nutrient content of fertilizers, while urea subsidy fixes prices for urea irrespective of nutrient content.

Q6. What is nutrient-based subsidy policy 2010?
Ans. Introduced in 2010, it replaced fixed-price subsidies with nutrient-based subsidies to encourage balanced fertilization.

Q7. What is a nutrient-based subsidy?
Ans. A subsidy based on the nutrient content (like nitrogen, phosphorus, potassium, sulfur) of fertilizers.

Q8. What is the full form of NPK?
Ans. Nitrogen (N), Phosphorus (P), and Potassium (K).