Context: Cabinet Approves revision in Nutrient Based Subsidy (NBS) rates for RABI Season, 2022-23 and for KHARIF Season, 2023 on Phosphatic and Potassic (P&K) fertilizers Nutrient Based Subsidy Scheme.
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About Nutrient Based Subsidy (NBS) Scheme
- The Nutrient Based Subsidy Scheme provides subsidies for all non-urea-based fertilizers. Under the NBS regime – fertilizers are provided to
- the farmers at the subsidized rates based on the nutrients (N, P, K & S) contained in these fertilizers.
- Also, the fertilizers which are fortified with secondary and micronutrients such as molybdenum (Mo) and zinc are given additional subsidy.
- The subsidy on P&K fertilizers is announced, by the Government on an annual basis for each nutrient on a per kg basis for Rabi and Kharif seasons.
- The subsidy on P&K fertilizers is being governed by NBS Scheme since 2010.
- It is being implemented by the Department of Fertilizers, Ministry of Chemicals & Fertilizers.
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Significance of the NBS Scheme
It will have the the two-fold benefit of ensuring availability of DAP and other P&K fertilizers to farmers at subsidized,
Affordable and reasonable prices and will also ensure rationalization of subsidy on P&K fertilizers .
Balanced nutrient availability will improve soil health which in turn enhances yield of crops resulting in increased income to the farmers.
Concerns Related with NBS Scheme
- Imbalanced Price and Deteriorating Soil Health: All Non-Urea based fertilisers are regulated under
- NBS Scheme however on the other hand the prices of other on regulated fertilizers have gone up. This led to the more application of subsidised urea fertilizers on soil lead to soil nutrient imbalance.
- Costs of Subsidies: Fertilizer subsidies are the second-largest subsidy after food subsidies. Thus it leads to fiscal imbalances of budgets
- Diversion: Subsidized urea is being diverted to large purchasers, traders, or even non-agricultural consumers like plywood manufacturers and producers of animal feed. The government loses around Rs 6,000 crore annually due to illegal diversion of highly subsidised urea for industrial use.
- It has also been diverted to neighbouring countries like Bangladesh and Nepalthat leads to enhenaced border related crimes such as black marketing.
- Environmental Pollution: The compounded harmful effects of imbalanced fertilizer use are not only intensifying soil and atmospheric pollution but also impacting water bodies (eutrophication) and causing threat to biodiversity and human health.