PM PRANAM Scheme

Context:

In order to reduce the use of chemical fertilisers by incentivising states, the Union government plans to introduce a new scheme – PM PRANAM, which stands for PM Promotion of Alternate Nutrients for Agriculture Management Yojana.

Relevance:

GS II: Government Policies and Intervention

Dimensions of the Article:

1. What is the PM PRANAM scheme?
2. Why is the scheme being introduced?

What is the PM PRANAM scheme?

• The proposed scheme intends to reduce the subsidy burden on chemical fertilisers, which is expected to increase to Rs 2.25 lakh crore in 2022-2023, which is 39% higher than the previous year’s figure of Rs 1.62 lakh crore.
• The scheme will not have a separate budget and will be financed by the “savings of existing fertiliser subsidy” under schemes run by the Department of fertilisers.

Subsidies:

• 50% subsidy savings will be passed on as a grant to the state that saves the money,
• 70% of the grant provided under the scheme can be used for asset creation related to technological adoption of alternate fertilisers and alternate fertiliser production units at village, block and district levels.
• The remaining 30% grant money can be used for incentivising farmers, panchayats, farmer producer organisations and self-help groups that are involved in the reduction of fertiliser use and awareness generation.
• The government will compare a state’s increase or reduction in urea in a year, to its average consumption of urea during the last three years.

Why is the scheme being introduced?

• Due to increased demand for fertiliser in the country over the past 5 years, the overall expenditure by the government on subsidy has also increased.
• The total requirement of four fertilisers — Urea, DAP (Di-ammonium Phosphate), MOP (Muriate of potash), NPKS (Nitrogen, Phosphorus and Potassium) — increased by 21% between 2017-2018 and 2021-2022, from 528.86 lakh metric tonnes (LMT) to 640.27 LMT
• In light of the increased demand, the government has also been increasing the subsidies it provides for chemical fertilisers.
  • However, the final figure of fertiliser subsidy touched Rs 1.62 lakh crore in 2021-22.
• PM PRANAM, which seeks to reduce the use of chemical fertiliser, will likely reduce the burden on the exchequer.
  • The proposed scheme is also in line with the government’s focus on promoting the balanced use of fertilisers or alternative fertilisers in the last few years.

-Source: Indian Express