To prevent diversion of highly subsidised fertilisers for non-agricultural use, a parliamentary panel on Tuesday recommended integrating Aadhaar-based authentication of the fertiliser ministry’s database with the digital farmers’ registry and PM-Kisan schemes of the agriculture ministry to ensure better targeting of beneficiaries.
“The Integrated Fertiliser Management System (iFMS) portal has identified 18.7 crore unique buyers, and 6.25 crore of them have availed the fertiliser subsidy, which contradicts the PM-Kisan database of the agriculture ministry,” the Standing Committee on Chemicals and Fertilisers (2025–26) said in its report.
The panel expressed concern that farmer identification is currently being carried out without a well-defined mechanism to ascertain the actual beneficiary.
“As a result, subsidised fertilisers, particularly urea, are susceptible to diversion for stocking, black marketing, and use in industrial sectors such as resins, adhesives, plastics, foams, textiles, leather, and paper and pulp industries,” it observed.
What did the committee recommend?
The committee recommended integrating the agriculture ministry’s direct cash transfer data under PM-Kisan and the digital farmers’ registry — which contains details on landholdings and crops grown — with the fertiliser department’s digital platform to ensure that only genuine farmers benefit from the highly subsidised fertiliser scheme.
It also suggested expanding the direct cash transfer scheme to select districts across different regions to understand farmers’ fertiliser purchasing behaviour and identify constraints more comprehensively.
“In the absence of a pilot study on direct cash transfer and without plugging the loopholes in the present Aadhaar-based identification ‘no-denial’ policy, issues of diversion and subsidy leakage cannot be effectively addressed,” the panel noted.
The committee further observed that the recent shortfall in the supply of phosphorus (P) and potassium (K) fertilisers — particularly Di-Ammonium Phosphate (DAP) — has exposed critical weaknesses in India’s fertiliser supply chain.
What’s the present condition?
At present, urea is provided to farmers through about three lakh retail outlets at a notified maximum retail price of ₹242 per 45-kg bag since March 2018, while the subsidy borne by the government is around 85–90%.
Similarly, retail prices of phosphatic and potassic (P&K) fertilisers, including DAP, were decontrolled in 2010 with the introduction of a fixed-subsidy regime under the Nutrient-Based Subsidy (NBS) mechanism.
As per the revised estimate, the government has pegged the fertiliser subsidy for FY26 at ₹1.86 lakh crore, while the budget estimate for FY27 stands at ₹1.71 lakh crore.
To promote the use of nano fertilisers, the panel recommended that the fertiliser ministry conduct additional multi-location and multi-crop trials to study their long-term impact on soil fertility and ecosystem sustainability.
“There is a greater need for monitoring and wider adoption, besides addressing farmers’ concerns to simplify methods of nano urea and DAP usage,” the committee added.
In June 2021, cooperative major IFFCO launched nano urea in liquid form as an alternative to conventional urea. In April 2023, it introduced nano DAP to reduce India’s import dependence on conventional soil nutrient varieties.