🏛️ Legacy IAS – Bangalore | UPSC Civil Services Coaching
Fertiliser Sector Regulation in India
GS Paper III – Indian Economy | Urea MRP · NBS · PMBJP · DBT · Nano Urea · PM-PRANAM | Updated Current Affairs 2024–25 | PYQs + MCQs
⚡ Jump to Section
Regulatory Framework
Urea Regulation
NBS Scheme
Pros & Cons
Key Initiatives
Nano Fertilisers
Current Affairs 2024-25
Way Forward
Mains PYQs
Practice MCQs
₹1,91,836 Cr
Final Fertiliser Budget 2024-25
₹242
Urea MRP per 45 kg bag (unchanged since March 2018)
11:4:1
Actual N:P:K ratio (vs ideal 4:2:1)
87%
Urea consumption met domestically
100%
MOP (Muriate of Potash) imported
70 Mn
Nano Urea bottles sold (Aug 2021–Feb 2024)
1. Current Regulatory Framework
| Control Mechanism | Legal / Policy Basis | Key Feature |
|---|---|---|
| Statutory Urea Pricing | Essential Commodities Act; Fertiliser Control Order (FCO) 1985 | Central Government fixes pan-India MRP at ₹242 per 45 kg bag (exclusive of neem-coating charges and taxes) — unchanged since March 1, 2018 |
| NBS for P&K Fertilisers | Nutrient-Based Subsidy (NBS) Scheme — operational since April 1, 2010 | Fixed subsidy per nutrient content (N, P, K, S) for phosphatic and potassic fertilisers including DAP; MRP set by companies at "reasonable" levels monitored by government |
| Logistical Command | Fertiliser (Movement Control) Order 1973 | Department of Fertilisers (DoF) determines railway "rake" destinations and state-wise monthly supply plans to ensure equitable distribution |
| Branding Uniformity | PM Bhartiya Jan Urvarak Pariyojana (PMBJP) / One Nation One Fertiliser (ONOF) | Single brand name "Bharat" mandated for all subsidised fertilisers — PMBJP branding requirement for all subsidised fertilisers from October 2022 |
| Digital Accountability — DBT | Direct Benefit Transfer (DBT) system in fertilisers | 100% subsidy released to companies only after Aadhaar-authenticated PoS (Point of Sale) sales; farmer-wise fertiliser purchase data captured in real-time |
| Anti-Tagging Directives | State-level prohibitions (e.g., Uttar Pradesh) | Prohibit authorised urea dealers from selling non-subsidised speciality nutrients alongside subsidised fertilisers — prevents forced "tagging" of premium products |
| Neem-Coating Mandate | Department of Fertilisers notification (2015) | 100% of indigenously produced urea must be neem-coated — slows nitrogen release, reduces diversion for industrial use (plywood, resins, milk adulteration) |
2. Urea Regulation — The Core Issue
📦 Urea in Numbers
- MRP: ₹242 per 45 kg bag — unchanged since March 1, 2018
- Actual cost of production/delivery: ₹2,000–3,500+ per bag
- Government bridges the gap as subsidy to manufacturers/importers
- Domestic production meets ~87% of demand; rest imported (mainly from Oman, Russia, China)
- India targets urea self-sufficiency — goal of zero imports by end-2025 (Mandaviya, 2024)
- Total urea subsidy: largest component of India's fertiliser subsidy bill
⚠️ The Nutrient Imbalance Crisis
N:P:K ratio: The heavy subsidy on urea (nitrogen-N) with market pricing for P and K has created a dangerous imbalance:
- Actual India N:P:K ratio: 11:4:1 (as of recent estimates)
- Ideal ratio: 4:2:1
- Excess nitrogen application: soil acidification, groundwater nitrate pollution, greenhouse gas (N₂O) emissions
- Punjab-Haryana: most severe imbalance due to paddy-wheat system dependence on urea
- Soil fatigue and declining yield response to fertiliser inputs — reducing marginal productivity
The Diversion Problem: Cheap subsidised urea (₹242/bag vs market ₹2,000+/bag) incentivises diversion to: (1) Industrial uses — plywood manufacturing, resins, synthetic milk adulteration; (2) Cross-border smuggling; (3) Overuse leading to soil degradation. Neem coating (mandatory since 2015) makes urea bitter and unsuitable for industrial use — reducing diversion significantly. Aadhaar-linked PoS DBT further curbs leakage by ensuring subsidy flows only on actual agricultural sales.
3. Nutrient-Based Subsidy (NBS) Scheme
🧪 NBS — How It Works
Operational since April 1, 2010 for Phosphatic and Potassic (P&K) fertilisers including DAP, MOP, NPK, NPKS grades. Unlike urea (price-controlled), P&K sector is decontrolled — companies fix MRP based on market dynamics, but government monitors for "reasonableness."
- Mechanism: Fixed subsidy per nutrient (₹/kg of N, P, K, S) decided annually or bi-annually by Cabinet; subsidy paid directly to companies
- DAP special package: One-time additional ₹3,500/MT above NBS rates for April 2024–March 2025 due to geopolitical supply disruptions
- DAP challenge: Only ~40% of DAP is domestically produced; 60% imported — vulnerable to global price volatility
- MOP: 100% imported — India has no domestic potash reserves; vulnerable to supply chain disruptions
- NBS 2024-25: Budget raised from ₹45,000 crore (BE) to ₹54,310 crore via Supplementary Demands for Grants
- Kharif 2025 NBS: Cabinet approved ₹37,216.15 crore outlay for Kharif season (April–September 2025)
| Fertiliser Type | Price Control? | Subsidy Mechanism | Production |
|---|---|---|---|
| Urea | ✅ Yes — MRP fixed at ₹242/45 kg | Government pays difference between cost of production and MRP to companies | ~87% domestic; 13% imported |
| DAP (Di-Ammonium Phosphate) | Decontrolled (monitored) | NBS per-nutrient subsidy + special package (₹3,500/MT in 2024-25) | ~40% domestic; 60% imported |
| MOP (Muriate of Potash) | Decontrolled | NBS subsidy per kg of K content | 100% imported — no domestic potash reserves |
| NPK / NPKS grades | Decontrolled | NBS per-nutrient subsidy | ~90% domestic production |
| Nano Urea / Nano DAP | Market-priced | No direct subsidy — promotion through PM-PRANAM, demonstrations | IFFCO + Coromandel + Zuari; domestic production scaling up |
4. Arguments For & Against Fertiliser Controls
✅ Arguments FOR Controls
- Inflation insulation: Fixed urea pricing shields domestic cost of cultivation and MSP regime from global natural gas and phosphoric acid price volatility (e.g., post-2022 Russia-Ukraine spike)
- Equitable distribution: Centralised "rake" allocation ensures supply in remote/logistically unviable districts that a profit-driven market might underserve
- Anti-tagging safeguard: Restrictions on tied-in sales protect marginal farmers from coercive bundling of essential urea with high-margin non-subsidised nutrients
- Leakage reduction: Aadhaar-linked PoS + neem coating + DBT collectively curb diversion to industrial sectors
- Quality standardisation: Uniform "Bharat" branding and central oversight reduce spurious/sub-standard fertiliser proliferation
- Food security: Affordable fertilisers support foodgrain production — India reached record 332 MT foodgrain production in 2023-24
❌ Arguments AGAINST Controls
- Nutrient imbalance: Disproportionate urea subsidy has skewed N:P:K ratio to 11:4:1 against ideal 4:2:1 — accelerating soil fatigue and degrading long-term fertility
- Fiscal burden: Fertiliser subsidy ₹1.71+ lakh crore in 2023-24; total budget ₹1.91 lakh crore in 2024-25 — crowding out other agricultural investment
- Innovation suppression: Anti-tagging prohibitions on unsubsidised speciality nutrients at subsidised outlets discourage private R&D in precision farming (water-soluble NPKs, biostimulants)
- Brand dilution: "Bharat" mandate converts differentiated products into generic commodities — removes incentive for extension services or localised soil testing by companies
- Regulatory uncertainty: Sudden, retrospective prohibitions on approved products signal policy unpredictability and deter private investment
- Liquidity crunch: Post-sale subsidy reimbursement model ties up working capital for extended periods — firm solvency dependent on government disbursement cycles
- Overuse incentive: Cheap urea encourages excess application — soil acidification, N₂O emissions, groundwater pollution
5. Key Government Initiatives
PM Bhartiya Jan Urvarak Pariyojana (PMBJP) / One Nation One Fertiliser scheme mandates a single brand name "Bharat" for all subsidised fertilisers — Bharat Urea, Bharat DAP, Bharat NPK, Bharat MOP.
- Launched October 2022; all subsidised fertilisers to carry "Bharat" brand with PM's photograph and scheme details on bags
- Rationale: Make government subsidy visible to farmers; prevent brand-based misinformation; standardise quality
- Criticism: Removes brand differentiation; companies lose ability to market quality products; reduces incentive for innovation
- Status: Compliance high for urea; partial for DAP and NPK grades
CCEA approved PM-PRANAM in June 2023 — aims to reduce chemical fertiliser dependence, incentivise states to promote balanced/alternative fertiliser use, and restore soil health.
- Period: FY 2023-24 to FY 2025-26 (3 years)
- Incentive mechanism: States saving on fertiliser subsidy by reducing chemical fertiliser consumption can receive 50% of the savings as grants for alternative fertilisers and village/block-level farmer awareness
- No new funds: PM-PRANAM funded entirely from savings under existing fertiliser subsidy schemes — no separate budget allocation
- Promotes nano urea, nano DAP, biofertilisers, organic farming, and resource conservation technologies
- Status 2024-25: Gaining traction; IFFCO conducting 5,800+ Nano DAP/Urea field trials across 15 agro-climatic zones; DoF launched "Maha Abhiyan" campaign
Integrated Fertiliser Management System (iFMS) and Mobile Fertiliser Management System (mFMS) provide real-time tracking of fertiliser movement and availability.
- iFMS tracks movement of subsidised fertilisers nationwide from factories/ports to retailers
- mFMS enables real-time access for farmers to check fertiliser availability at nearby outlets
- DBT PoS integration: every subsidised fertiliser sale Aadhaar-authenticated — creates a comprehensive national database of fertiliser purchases by farmer
- PM Kisan Samridhi Kendras (PMKSKs): One-stop shops at retail level for fertilisers, seeds, pesticides, soil health cards — 3+ lakh PMKSKs operational
100% of indigenously produced urea mandatorily neem-coated since 2015.
- Benefits: Slows nitrogen release → improves nitrogen use efficiency; reduces diversion for industrial use (urea's bitter taste from neem makes it unsuitable for plywood/resins/milk adulteration); reduces the number of urea applications per season
- Studies show NCU improves crop yield by 5–8% and reduces urea consumption per unit area by ~7%
- India first country to mandate 100% neem-coated urea at this scale
- Criticism: Neem coating adds minor cost; quality control of neem coating not always uniform
DBT in fertilisers ensures that the 100% subsidy is released to companies only after Aadhaar-authenticated PoS sales to farmers — preventing ghost sales or stockpiling.
- PoS devices at all ~2.5 lakh+ fertiliser retail outlets linked to Aadhaar database
- Farmer's Aadhaar biometric/OTP authentication at point of purchase — ensures actual farmer receives subsidised fertiliser
- Data integration: PoS sales data linked to AgriStack Farmer Registry → real-time visibility on fertiliser consumption patterns
- Companies receive subsidy post-sale (not pre-sale) — significant working capital burden; reimbursement cycles can be 1–3 months
- Saved significant amounts in diversion prevention — estimated ₹10,000–15,000 crore savings annually from reduced diversion
6. Nano Fertilisers — The Future of Indian Agriculture
🔬 Nano Urea (Liquid)
- Developed by IFFCO; PM Modi approved February 24, 2021; marketing started August 2021
- Available in 500 ml bottles; one bottle = one bag (45 kg) of conventional urea in terms of nitrogen supply
- Contains 4% nitrogen in nanoparticle form; applied as foliar spray — superior targeted delivery
- Sales: 70 million bottles sold between August 2021 and February 2024
- Production capacity: ~17 crore bottles/year (by March 2023)
- Benefit: Reduces conventional urea imports; saves ₹1,200 crore foreign exchange per 7.5 crore bags equivalent
- Controversy: Critics argue 500 ml bottle contains only 4% N (~20g) vs 45 kg bag's 46% N (~20 kg) — mechanism of equivalent delivery disputed by some scientists
🌿 Nano DAP (Liquid)
- Launched March 2023 by IFFCO; also manufactured by Coromandel International and Zuari Farm Hub
- Notified under Fertiliser Control Order (FCO) 1985 after bio-efficacy trials and toxicology tests
- Applied as seed treatment and foliar spray — reduces conventional granular DAP application
- Production (till December 2024): 262.44 lakh bottles; Sales: 181.25 lakh bottles
- Budget 2024-25 (Interim): FM announced expansion of Nano DAP to all agro-climatic zones
- Benefit: DAP is 60% imported — domestic Nano DAP production reduces import dependency and foreign exchange outflow
- Available at PM Kisan Samridhi Kendras (PMKSKs)
Nano Fertilisers vs Conventional — Key Comparison for UPSC: Conventional urea bag = 45 kg, 46% N, soil-applied. Nano Urea bottle = 500 ml, 4% N, foliar spray. The claim of equivalence is based on improved absorption efficiency through nano-delivery — but ICAR has noted that nano urea supplements rather than fully replaces conventional urea. PM-PRANAM incentivises states to reduce chemical fertiliser use, and nano fertilisers are central to this strategy. Namo Drone Didi scheme (15,000 Women SHGs with drones) is specifically being used to spray nano urea and nano DAP — creating a convergence between gender empowerment and sustainable farming.
7. Current Affairs 2024–25 High Priority
💰 Fertiliser Budget 2024-25 — ₹1,91,836 Crore Final Allocation
- Original BE (Budget Estimate): ₹1,68,131 crore; raised to ₹1,91,836 crore via Supplementary Demands for Grants
- NBS allocation: raised from ₹45,000 crore to ₹54,310 crore
- Urea subsidy continues at fixed MRP ₹242/45 kg — government covers entire gap between actual cost (₹2,000–3,500+) and MRP
- Total fertiliser subsidy in 2023-24: ~₹1,70,923 crore (as of January 2024)
- 2025-26 projected outlay: ₹1,71,082.44 crore (after Finance Ministry cut of 7.38% from Ministry's requested ₹1,84,704 crore)
- Context: Fertiliser subsidy is India's single largest agricultural subsidy — exceeding food subsidy in recent years
🌾 NBS Kharif 2025 — Cabinet Approval (March 28, 2025)
- Cabinet approved revised NBS rates for Kharif 2025 season (April 1 – September 30, 2025)
- Total outlay: ₹37,216.15 crore — ~₹13,000 crore more than the Rabi 2024-25 season
- Covers P&K fertilisers including NPK and NPKS grades
- Rationalization of subsidy rates based on recent international fertiliser price trends
- Special DAP package (₹3,500/MT above NBS) was extended till March 2025; continuation into Kharif 2025 under review
🧪 PM-PRANAM & Nano Fertilisers — 2024-25 Progress
- Over 5,800 field trials of Nano DAP and Nano Urea conducted across 15 agro-climatic zones (Ministry of Chemicals & Fertilisers)
- IFFCO: 2,500 Nano DAP trials (2024-25) + 2,938 trials in 2025-26 so far; ~900 Nano Urea trials
- DoF launched "Maha Abhiyan" for Nano DAP adoption + 100-district campaign for Nano Urea Plus
- November 2024: National Fertilizers Limited (NFL) entered Nano Urea production — plant at Nangal, capacity 1.5 lakh bottles/day
- Nano Urea and Nano DAP available at all PM Kisan Samridhi Kendras (PMKSKs)
- Namo Drone Didi: 1,094 drones used by Women SHGs specifically for nano fertiliser spraying — convergence of gender empowerment and precision farming
🏭 Urea Self-Sufficiency Goal & New Plants
- India targeted zero urea imports by end-2025 (Agriculture Minister, April 2024)
- Five new urea plants were revived/commissioned — Ramagundam, Gorakhpur, Sindri, Barauni, Talcher — adding ~6.4 MT capacity
- Current domestic urea production capacity: ~25-26 MT; consumption: ~35 MT — still 13% import gap
- Green Ammonia potential: Government exploring natural gas replacement with green hydrogen-based ammonia to reduce LNG import cost for urea production
- IFFCO has international patent for Nano Urea/Nano DAP technology — earns 20% royalty on global sales for 20 years
8. Way Forward
📊 NBS Integration for Urea
Gradually transition urea into the Nutrient-Based Subsidy (NBS) framework to correct nitrogen bias and restore balanced N:P:K fertilisation. DBT 2.0: shift subsidy from company to direct farmer bank transfer — allows market-based pricing while preserving farmer purchasing power.
🗺️ Soil Health Card Integration
Integrate Soil Health Card data with PoS systems — farmer's subsidy eligibility dynamically linked to soil nutrient status. Farmers with adequate N levels receive lower urea subsidy; those needing P/K get enhanced NBS support. Prevents wasteful over-application while maintaining food security.
🌿 Green Ammonia & Nano Scale-Up
Scale up Green Ammonia (hydrogen-based) production to reduce fiscal burden of LNG imports for urea manufacturing. Expand Nano Urea and Nano DAP to all agro-climatic zones (Budget 2024-25 mandate). PM-PRANAM incentives for states to reduce chemical fertiliser consumption.
🔬 Speciality Nutrient Liberalisation
De-link non-subsidised speciality nutrients (water-soluble NPKs, biostimulants, micronutrients) from restrictive Essential Commodities Act oversight. Foster precision-farming innovation by separating the regulated subsidised fertiliser market from the innovative speciality nutrients market.
💹 Subsidy Rationalisation
Implement Direct Benefit Transfer to farmer accounts — market pricing with full DBT protection maintains affordability while eliminating diversion. Nano Urea + Natural Farming (NMNF) convergence reduces chemical fertiliser demand organically over 5–10 year horizon.
🌍 Import Diversification
Long-term bilateral agreements with potash-rich nations (Canada, Belarus, Russia) for MOP supply security. Green phosphoric acid partnerships for DAP production. Domestic potash exploration (Rajasthan, Karnataka) to reduce 100% import dependence on MOP.
The Policy Paradox: India subsidises cheap urea (₹242/bag vs ₹2,000+ cost) to help farmers — but this creates soil degradation, fiscal strain (₹1.7 lakh crore/year), and innovation barriers. The way forward requires moving from "price control" to "outcome control" — ensuring soil health and farmer income, not just cheap fertiliser prices. DBT to farmers, NBS for urea, and Soil Health Card integration form the reform trinity.
9. UPSC Mains PYQs
12.5 Marks
⏱ ~15 minutes | 175 words
GS Paper IIIUPSC 2015Directly Asked
In what way could replacement of price subsidy with Direct Benefit Transfer (DBT) change the scenario of subsidies in India? Discuss. (UPSC 2015)
Introduction: India's subsidies (food, fertiliser, fuel) total ₹5+ lakh crore annually — characterised by inefficiency, diversion, and market distortions. DBT = direct cash transfer to beneficiary bank accounts, bypassing intermediaries.
How DBT Would Change the Scenario:
How DBT Would Change the Scenario:
- Eliminate diversion: In fertilisers — DBT to farmer accounts ensures urea subsidy reaches only genuine farmers; stops industrial diversion (plywood, resins, milk adulteration). In food — PDS leakages (ghost ration cards) eliminated by Aadhaar-linked DBT
- Market pricing restoration: Urea at market price (₹2,000+/bag) with DBT of subsidy amount in farmer account — correct N:P:K distortion; encourage balanced fertilisation
- Fiscal efficiency: Only actual beneficiaries receive subsidy; eliminates stockpiling and black-market arbitrage; estimated savings of 20–25% of subsidy value (NITI Aayog estimates)
- Farmer empowerment: Cash in hand allows farmers to choose best available fertiliser/variety — market responds to demand (innovation incentivised)
- Plugging ghost beneficiaries: JDY + Aadhaar + Mobile (JAM trinity) enables targeted delivery — verified beneficiary list eliminates phantom claims
- Financial exclusion: marginal farmers without bank accounts or smartphones miss DBT
- Market failure risk: if prices spike after subsidy removal, farmers bear shock before DBT credited
- Fertiliser market oligopoly: price decontrol without competition → companies may collude on pricing
- Transition period: simultaneous shift from price control to DBT requires robust digital infrastructure
10 Marks
⏱ ~12 minutes | 150 words
GS Paper IIIUPSC 2013
What are the different types of agriculture subsidies given to farmers at national and state levels? Critically analyse the agricultural subsidy regime with reference to distortions created by it. (UPSC 2013)
Introduction: Agricultural subsidies = government support to reduce input costs or stabilise output prices. India's agri subsidies total ₹3–4 lakh crore annually across central and state levels.
Types of Agricultural Subsidies:
Types of Agricultural Subsidies:
- Fertiliser subsidy: ₹1.71+ lakh crore (2023-24) — urea fixed at ₹242/bag vs ₹2,000+ cost; NBS for P&K
- Food subsidy: ₹2+ lakh crore — PDS rice/wheat at ₹1-2/kg under PMGKAY; MSP procurement
- Power subsidy: State governments — free/subsidised electricity for irrigation pumps (Punjab ₹8,000+ crore/year)
- Irrigation subsidy: Water charges below operation cost in canal irrigation systems
- Credit subsidy: Kisan Credit Card at 4% (with prompt repayment rebate); interest subvention under AIF
- Crop insurance subsidy: Government shares 50% of actuarial premium under PMFBY
- State-level: Loan waivers; free seeds; input subsidies; market purchase at above-MSP prices
- Nutrient imbalance: Urea subsidy → N:P:K ratio 11:4:1 vs ideal 4:2:1 → soil acidification, yield plateau
- Water overuse: Free electricity for pumps + subsidised irrigation → groundwater depletion (Punjab water table falling 50 cm/year)
- Crop choice distortion: MSP + PDS demand for rice/wheat → paddy monoculture in water-stressed Punjab, Haryana; discourages crop diversification
- Fiscal burden: States trapped in subsidy competition; crowds out capital expenditure on rural infrastructure
- Diversion: Cheap urea diverted to industry; PDS grain diverted to open market
- WTO pressure: High subsidies under "Amber Box" (trade-distorting) face WTO scrutiny; India uses "Development Box" defences
10 Marks
⏱ ~12 minutes | 150 words
GS Paper IIICurrent Affairs 2024-25
What is the significance of Nano Urea and Nano DAP in India's fertiliser policy? How do they contribute to reducing India's import dependency and addressing the nutrient imbalance problem?
Introduction: India's fertiliser subsidy bill exceeds ₹1.7 lakh crore annually; 13% of urea and 60% of DAP is imported. Nano fertilisers offer a technological leap toward reducing this dependency and correcting soil health damage.
What are Nano Fertilisers? IFFCO-developed liquid formulations in 500 ml bottles — Nano Urea (launched 2021), Nano DAP (launched 2023). Applied as foliar spray or seed treatment; nanoparticle size enables targeted cellular delivery, improving absorption efficiency.
Reducing Import Dependency:
Conclusion: Nano fertilisers represent India's most promising policy-technology convergence — simultaneously addressing fiscal burden, import dependency, and soil health. Budget 2024-25 announced expansion of Nano DAP to all agro-climatic zones.
What are Nano Fertilisers? IFFCO-developed liquid formulations in 500 ml bottles — Nano Urea (launched 2021), Nano DAP (launched 2023). Applied as foliar spray or seed treatment; nanoparticle size enables targeted cellular delivery, improving absorption efficiency.
Reducing Import Dependency:
- Nano Urea: 70 million bottles sold (Aug 2021–Feb 2024); equivalent reduction in conventional urea imports; India targets urea self-sufficiency by end-2025
- Nano DAP: India imports 60% of DAP — domestic Nano DAP production (IFFCO, Coromandel, Zuari) reduces this; saves foreign exchange
- IFFCO holds international patent — earns 20% royalty on global sales, making India a technology exporter in agriculture
- Nano Urea as foliar spray improves nitrogen use efficiency — less soil-applied nitrogen → reduces N:P:K ratio distortion
- Nano DAP provides targeted phosphorus delivery → farmers more likely to use P when it's affordable and efficient
- PM-PRANAM: incentivises states to reduce chemical fertiliser use; nano fertilisers central to substitution strategy
- Namo Drone Didi: Women SHGs spray nano fertilisers via drones — precise application avoids over-spreading
Conclusion: Nano fertilisers represent India's most promising policy-technology convergence — simultaneously addressing fiscal burden, import dependency, and soil health. Budget 2024-25 announced expansion of Nano DAP to all agro-climatic zones.
10. Practice MCQs — Fertiliser Sector
Q 1
The current MRP of urea in India is ₹242 per 45 kg bag. Since when has this price been unchanged?
The MRP of urea at ₹242 per 45 kg bag has remained unchanged since March 1, 2018 — confirmed by multiple official PIB statements and parliamentary responses through 2024-25. This means farmers have been paying the same price for urea for over 7 years, while actual production/delivery costs rose significantly (to ₹2,000–3,500+ per bag), with the government bearing the entire difference as subsidy. This has kept urea affordable but created the fiscal burden of ₹1.7+ lakh crore in annual fertiliser subsidy. The price stability despite global natural gas price volatility (especially post-2022 Russia-Ukraine war) demonstrates the extent of government intervention in urea pricing. Correct answer: (c).
Q 2
Consider the following about India's N:P:K ratio in fertiliser use:
1. The current national N:P:K ratio is approximately 11:4:1.
2. The ideal recommended N:P:K ratio is 4:2:1.
3. The imbalance is primarily caused by the higher subsidy on urea (nitrogen) compared to phosphatic and potassic fertilisers.
4. Excess potassium (K) usage is the biggest contributor to soil degradation in India.
Which are CORRECT?
1. The current national N:P:K ratio is approximately 11:4:1.
2. The ideal recommended N:P:K ratio is 4:2:1.
3. The imbalance is primarily caused by the higher subsidy on urea (nitrogen) compared to phosphatic and potassic fertilisers.
4. Excess potassium (K) usage is the biggest contributor to soil degradation in India.
Which are CORRECT?
Statement 4 is WRONG: The biggest contributor to soil degradation in India is excess nitrogen (N) usage — not potassium. In fact, potassium (K) is under-applied in Indian soils (ratio 11:4:1 for N:P:K), causing widespread potassium deficiency in soils. MOP (Muriate of Potash) is 100% imported and expensive, so farmers apply too little K. Statements 1 ✅ (N:P:K ratio ~11:4:1 — actual data), 2 ✅ (ideal ratio 4:2:1), 3 ✅ (urea subsidy at ₹242/bag vs NBS-supported P&K at market rates — disproportionate N subsidy drives imbalance). The consequences of excess N: soil acidification, N₂O greenhouse gas emissions, groundwater nitrate pollution, declining crop response to fertiliser. Correct answer: (c).
Q 3
PM-PRANAM scheme (2023) is significant because:
PM-PRANAM (PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth) was approved by CCEA in June 2023 for FY 2023-24 to 2025-26. Its distinctive feature: no separate budget allocation — it is funded entirely from savings generated from existing fertiliser subsidy schemes. States that reduce chemical fertiliser consumption (thereby saving subsidy funds) are rewarded with 50% of those savings as grants for: village/block-level farmer awareness, promoting alternative fertilisers (nano fertilisers, biofertilisers, organic), and implementing resource conservation. This incentive mechanism aligns state interests with the national goal of reducing chemical fertiliser overuse. Option (a) is wrong — no direct farmer cash subsidy. Option (b) is wrong — no separate ₹10,000 crore fund. Option (d) is wrong — no mandatory nano coating mandate exists. Correct answer: (c).
Q 4
Under the Nutrient-Based Subsidy (NBS) scheme, which of the following is correctly stated?
1. NBS covers phosphatic and potassic (P&K) fertilisers including DAP, MOP, and NPK grades.
2. Under NBS, MRP of P&K fertilisers is fixed by the Central Government similar to urea.
3. Urea is NOT covered under NBS — it has a separate Urea Subsidy Scheme with fixed MRP.
4. NBS has been operational since April 1, 2010.
1. NBS covers phosphatic and potassic (P&K) fertilisers including DAP, MOP, and NPK grades.
2. Under NBS, MRP of P&K fertilisers is fixed by the Central Government similar to urea.
3. Urea is NOT covered under NBS — it has a separate Urea Subsidy Scheme with fixed MRP.
4. NBS has been operational since April 1, 2010.
Statement 2 is WRONG: Under NBS, the P&K fertiliser sector is decontrolled — companies are allowed to fix MRP at "reasonable levels" monitored by government. This is the exact opposite of urea (whose MRP is centrally fixed at ₹242/bag). NBS provides a fixed subsidy per nutrient content, but companies determine the final MRP based on market dynamics. The government monitors for "reasonableness" — excessive prices can trigger intervention (special DAP package was one such measure in 2024). Statements 1 ✅ (NBS covers P&K including DAP, MOP, NPK, NPKS), 3 ✅ (Urea has separate Urea Subsidy Scheme with fixed MRP — distinct from NBS), 4 ✅ (NBS operational since April 1, 2010 — confirmed by official sources). Correct answer: (b).
Q 5
Consider the following statements about India's fertiliser import dependency:
1. About 87% of urea consumption is met domestically.
2. For DAP (Di-Ammonium Phosphate), only about 40% comes from local production.
3. India has substantial domestic potash (MOP) reserves that cover 60% of its requirement.
4. Green Ammonia production is being explored to reduce LNG import costs for urea manufacturing.
1. About 87% of urea consumption is met domestically.
2. For DAP (Di-Ammonium Phosphate), only about 40% comes from local production.
3. India has substantial domestic potash (MOP) reserves that cover 60% of its requirement.
4. Green Ammonia production is being explored to reduce LNG import costs for urea manufacturing.
Statement 3 is WRONG: India does NOT have substantial domestic potash reserves — 100% of MOP (Muriate of Potash) is imported. India has limited potassium deposits (some exploration in Rajasthan and Karnataka) but no commercially viable domestic production. MOP is primarily imported from Canada, Belarus, and Russia — making India's potassium supply highly vulnerable to geopolitical disruptions. This is a critical food security vulnerability. Statements 1 ✅ (87% domestic urea — confirmed PIB), 2 ✅ (only 40% DAP produced domestically; 60% imported — confirmed PIB), 4 ✅ (Green Ammonia using green hydrogen to replace LNG as feedstock for urea production is under government exploration — reduces import cost and carbon footprint). Correct answer: (b).
0 / 5
