Due to a sudden increase in the price of fertilisers and their raw materials on the worldwide market over the past five years, the fertiliser subsidy has increased significantly. The weight of government subsidies has increased as a result.
Between 2017–2018 and 2021–2022, the use of four fertilisers—urea, DAP, MOP, and NPKS—has increased by 21%, from 528.86 lakh metric tons (LMT) to 640.27 LMT.
The budget for fertiliser subsidies in FY 2021–2022 was originally set at Rs 79,530 crore but was amended to Rs 1.40 lakh crore in the government’s updated projections. In order to provide fertilisers to farmers throughout India at a reasonable cost, the government’s subsidy touched Rs. 1.62 lakh crore in 2021–22.
In spite of the rise in the price of fertiliser and its raw materials on the global market as well as the significant burden of subsidy payments, the government ensured that farmers in India could purchase fertiliser at an affordable price, hence increased the budget for fertiliser subsidies from Rs. 1.09 lakh crore to Rs. 2.18 lakh crore, or by 100%.
Indian government is taking various initiatives not only to reduce subsidy burden but also to make fertiliser available to the Indian farmers at affordable price and to increase their crop productivity as well.
The PM-PRANAM Yojana, or “PM Promotion of Alternate Nutrients for Agriculture Management Yojana,” is one of the next initiative in the fertiliser sector.
It is essential to provide crops with enough nutrients so that they can grow properly in order to increase productivity in agriculture in general and in particular. But over time, there has been an overuse of fertilisers that has led to soil erosion, an increase in salinity, and a decline in overall productivity because of fertiliser subsidies and farmers’ lack of understanding.
This programme will help in stopping the overuse of chemical fertilisers and in reducing chemical fertiliser use by using substitute fertilisers such as organic fertilisers, city compost, bio fertilisers, zymes, SSP, and PROM etc. Additionally, this will also help in administering the sufficient nutrients to the soil and enhancing soil health, allowing farmers to produce more crops.
Features of PM PRANAM Yojana:
• To encourage the states to provide a suitable environment in order to incentivize the farmers to minimise the total consumption of fertilisers.
• To cut back on the overall subsidy for chemical fertilisers, which is projected to rise to Rs 2.25 lakh crore in 2022–2023 — 39% more than the Rs 1.62 lakh crore figure for 2021.
This scheme is not supposed to outlay a different budget for fertiliser rationalisation, this plan will be funded by “savings from the existing fertiliser subsidies,” according to the Department of Fertilisers.
• The state will get a grant equal to 50% of the saved money on subsidies.
• The state can use 70% of these funds to expand its capability in the area of developing alternative fertilisers and alternative fertiliser production facilities at the village, block, and district levels.
• The remaining 30% of the grant funds can be used to support farmers, panchayats, farmer producer organisations, and self-help groups that are engaged in spreading awareness about the use of balance fertiliser.
• The government will evaluate total utilisation of fertilisers in terms of increase or decrease in overall consumption in a year over the previous three years.