To reduce mounting subsidy expenses and curb soil degradation through promotion of usage of nan-fertilisers and natural nutrients, the government will issue guidelines for launching the PM programme for restoration, awareness, nourishment and amelioration of mother earth (PM-Pranam) in the next couple of months.
Under the PM Pranam, announced by the finance minister Nirmala Sitharaman in her Budget speech last month, the states will be provided financial incentives for reduction in usage of chemical fertilisers through promotion of organic manure, bio-fertilisers, nano- urea and nano-di-ammonium phosphate (DAP).
Sources said that based on the state-wise assessment of actual reduction in consumption of chemical soil nutrients through integrated management system operated by the department of fertilisers, the Centre will provide financially rewards to state, equivalent to 50% the savings on chemical fertiliser subsidies.
Total use of fertilisers by states will be assessed against average consumption of soil nutrients in the last three years.
Out of total grant to the states, 70% can be utilised for setting up of alternate fertilisers production units.The remaining 30% of grant to the states can be utilised for panchayats, farmer producer organisations and self-help groups engaged in promotion of alternate soil nutrient use.
The annual consumption of chemical fertilisers in the country is 65 million tonne (MT), the demand for soil nutrients is rising by around 1.5% annually. “Even if we reduce chemical nutrients consumption by 2-3% in the next three years, it would result in savings of around Rs 20,000 crore in fertilisers subsidies,” an official told FE.
Sources said that the use of nitrogen (N), phosphorus (P) and potassium (K) by the farmers over the last few years have deviated significantly from the ideal NPK use ratio of 4:2:1. “This is because of wide variations in the subsidies provided to social nutrients like urea, DAP, muriate of potash etc,” an official said and this has led to soil erosion, rising salinity, and a fall in overall productivity.
A third of the country’s soil nutrient consumption are imported besides the feedstock (natural gas) used in urea manufacturing. Because of higher global prices caused by the Ukraine war, the fertilisers subsidy in 2022-23 has surged to a record Rs 2.53 trillion.
The farmers pay a fixed price Rs 242 per bag (45 kg) of urea against the cost of production of around Rs 2,650 per bag. The balance is provided by the government as a subsidy to manufacturing units.
The retail prices of P & K fertilisers, including DAP were ‘decontrolled’ in 2020 with the introduction of a ‘fixed-subsidy’ regime as part of Nutrient Based Subsidy mechanism announced by the government twice in a year.
It would be the third year in a row that the annual Budget spending in the current fiscal on fertilisers would be above Rs 1-trillion mark, against a lower range of Rs 70,000 – 80,000 crore in the past few years.