The Union Ministry of Chemicals and Fertilisers is planning to launch a scheme called PM PRANAM. PM PRANAM stands for – PM Promotion of Alternate Nutrients for Agriculture Management Yojana. The proposed scheme aims to encourage states to use less chemical fertilisers and to reduce the subsidy burden on chemical fertilisers.


Features of the proposed scheme

  • According to the officials, the scheme will not have a separate budget and will be funded by savings of existing fertiliser subsidies under schemes run by the Department of Fertilisers.
  • 50% of subsidy savings will be passed on to the state that saves the money as a grant.
    • 70% of the grant provided under the scheme can be used to create assets related to the technological adoption of alternate fertilisers and alternate fertiliser production units at the village block, and district levels.
    • The remaining 30% grant money can be used to reward and encourage farmers, panchayats, farmer producer organisations, and self-help groups involved in fertiliser reduction and awareness generation.
  • To illustrate the calculation in reducing chemical fertiliser use, a state’s increase or decrease in urea consumption in a year will be compared to its average consumption of urea over the previous three years.
    • Data from the Fertiliser Ministry’s dashboard, iFMS (Integrated Fertilisers Management System), will be used for this purpose.
  • The move is consistent with the government’s recent emphasis on promoting the balanced use of fertilisers or alternative fertilisers.


Fertilisers –

  • Fertilisers (can be both organic and inorganic) are substances that provide one or more of the chemicals required for plant growth.
  • As per industry experts, out of the 16 elements necessary for plant growth, 9 elements are required in large quantities (major elements), while the other 7 are needed in smaller amounts (minor elements).
      • Nitrogen, phosphorus and potassium are known as primary plant nutrients;
      • Calcium, magnesium and sulphur, as secondary nutrients;
      • Iron, manganese, copper, zinc, boron, molybdenum and chlorine as trace elements or micro-nutrients.
      • The primary and secondary nutrient elements are known as major elements.


Fertiliser consumption in India

  • The success of the agricultural sector in India is mainly dependent on the fertiliser industry.
  • It assumes significance in view of the sharp increase in the overall fertiliser requirement in the country during the last five years.
  • According to the Union Ministry of Chemicals and Fertilisers, the total requirement of four most used chemical fertilisers – Urea, DAP (Di-ammonium Phosphate), MOP (Muriate of potash), NPKS (Nitrogen, Phosphorus and Potassium), in the country increased by 21% in 2021-22 in comparison to 2017-18.
      • The maximum increase has been recorded in the requirement of DAP.


Burden of fertiliser subsidy

  • Farmers purchase fertilisers at MRPs (maximum retail prices) that are lower than their normal supply-and-demand market rates or the cost to produce or import them.
    • For example, the government set the MRP of neem-coated urea at Rs 5,922.22 per tonne (in 2020), while the average cost-plus price payable to domestic manufacturers and importers is around Rs 17,000 and Rs 23,000 per tonne, respectively.
  • For, non-urea fertiliser (DAP, MOP, etc) MRPs are decontrolled or fixed by the companies.
  • To ensure that these nutrients are priced at “reasonable levels,” the government pays a flat per-tonne subsidy.
  • The subsidy is paid to fertiliser companies, but the ultimate beneficiary is the farmer who pays MRPs that are lower than market-determined rates.
  • The subsidy burden on chemical fertilisers is expected to reach Rs 2.25 lakh crore in 2022-23 (Rs 1.62 lakh crore last year), a figure that is 39% higher than last year.


Government initiatives to reduce subsidy burden

  • The Centre had introduced a direct benefit transfer (DBT) system in fertilisers, which was implemented in 2018.
  • Under this system, 100% subsidy on various fertiliser grades is released to the fertiliser companies on the basis of actual sales made by the retailers to the beneficiaries.
    • Every retailer (over 2.3 lakh in India) now has a point-of-sale (PoS) machine that is linked to the Department of Fertilisers’ e-Urvarak DBT portal.
    • Only after the sale is registered on the e-Urvarak platform can a company claim a subsidy.
  • Furthermore, the government included new nutrients such as Nano urea and bio-stimulants in the Fertiliser Control Order, 1985.
  • In addition, initiatives such as the Soil Health Card and neem-coated urea have been implemented.