The government is working out the modalities of the PM-Pranam, a programme aimed at cutting the subsidy bill and incentivising states for promoting a balanced use of chemical fertilisers by farmers, according to sources.
Finance minister Nirmala Sitharaman in her Budget speech on Wednesday had referred to the programme as PM-Pranam, called Prime Minister Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth.
An official with the department of fertilisers told FE, “The scheme is meant to involve states in reaching out to farmers to achieve balanced use of chemical fertilisers and promote alternative soil nutrients such as nano-urea and nano-di-ammonium phosphate (DAP) and natural nutrients, which would improve soil quality.” The scheme also aimed at reducing the mounting subsidy burden through reduction in the use of chemical fertilisers by balanced use of soil nutrients by farmers.
Sources said the incentives structure for states for promoting the use of alternative fertilisers and balanced social nutrients by farmers are being worked out. As per the revised estimates, the fertiliser subsidy for the current fiscal is estimated to be Rs 2.25 trillion, which is an increase of 39% than Rs 1.62 trillion in 2021-22.
Sources said the actual subsidy in the current fiscal will be around Rs 2.45 trillion. It is mainly attributed to a spike in global prices of fertilisers and as well LNG, a key ingredient in the manufacturing of urea. Imports account for a third of domestic soil nutrients consumption of around 60 million tonne (MT) annually. The government is stepping up production of nano-urea in liquid form as an alternative to conventional urea while nano-DAP will be launched soon.Sources said the use of nitrogen, phosphorus and potassium by farmers over the past a few years have deviated significantly from the ideal use ratio of 4:2:1. “This is because of wide variations in subsidies provided to social nutrients like urea, DAP, muriate of potash (MOP),” an official said. In case of urea, farmers pay a fixed price Rs 242 per bag (45 kg) against the production cost of around Rs 2,650 per bag. The balance is provided by the government as a subsidy to fertiliser units. The retail prices of phosphatic and potassic (P&K) fertiliser, including DAP were ‘decontrolled’ in 2020 with the introduction of a fixed-subsidy regime as part of the nutrient-based subsidy mechanism announced by the government twice in a year. In September, fertiliser ministry officials had shared the objective of the PM-Pranam with the state government at the National Conference on Agriculture for Rabi Campaign.