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Nutrient Based Subsidy Scheme

The Union Cabinet approved Nutrient Based Subsidy (NBS) rates for Phosphatic and Potassic (P&K) fertilisers for Rabi season.

Why in News?

Recently, the Union Cabinet approved Nutrient Based Subsidy (NBS) rates for Phosphatic and Potassic (P&K) fertilisers for Rabi season 2022-23 from 1st October, 2022 to 31st March, 2023.

  • The NBS Scheme regulates all non-urea based fertilizers.

What is Nutrient Based Subsidy Scheme?

The initiation of the Nutrient Based Subsidy (NBS) Programme for Fertilizers took place in the year 2010.

  • Under the scheme, a fixed amount of subsidy decided on an annual basis is provided on each grade of subsidized Phosphatic and Potassic (P&K) fertilizers, except for Urea, based on the nutrient content present in them. 
  • The Department of Fertilizers under the Ministry of Chemicals & Fertilizers administers the scheme.
  • In a recent development, the Cabinet Committee on Economic Affairs has approved the proposal of the Department of Fertilizers for the continuation of the Nutrient Based Subsidy (NBS) till 2019-20.
  • Continuing the Nutrient Based Subsidy Scheme aims to ensure that an adequate quantity of P&K is made available to the farmers at a statutory controlled price.

Read also:- Nutrient Based Subsidy Scheme

Union Budget 2021 and Nutrient Based Subsidy Scheme

There have been no reforms in the Nutrient Based Subsidy Scheme in Union Budget 2021. Though Nirmala Sitharaman made an announcement to release an additional Rs 65,000 crore towards fertilisers subsidy over. And above Rs 71,000 crore allocated in the Budget for Fiscal Year (FY) 21 and for FY22, she has allocated close to Rs 80,000 crore.

Benefits of the scheme

  • It helps farmers in ensuring availability of essential nutrients at subsidized prices.
  • It rationalizes the subsidy on P&K fertilizers, ensuring effective and efficient utilization of government resources.

Way Forward

  • In order to address the imbalance in the fertilizer use, urea has to come under NBS.
  • A feasible way to do it is by hiking urea prices and simultaneously reducing the NBS rates of phosphorus, potash and sulphur to make other fertilisers cheaper.
  • Considering that all three nutrients namely N (nitrogen), P (phosphorus) and K (potassium) are critical to increasing crop yields and quality of produce, the government must necessarily go for a uniform policy for all fertilisers.
  • In the long run, a flat per-acre cash subsidy that could be used to purchase any fertilizer should replace NBS itself.
  • This subsidy must include value-added and customised products containing not just other nutrients, but delivering even nitrogen more efficiently than urea.

Read also:- 12th WTO Ministerial Conference

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