About

●The Nutrient Based Subsidy (NBS) scheme provides subsidised fertilisers to farmers in India.

●Launched in 2010, the scheme aims to ensure that farmers have access to fertilisers at affordable prices.

●Cabinet continued funding for the NBS was approved until 2019-20 to ensure availability of P&K fertilisers at controlled prices. However it has been extended further till 2024-25.

Objectives of NBS

●Ensure adequate availability of P&K fertilisers at controlled prices.

●Promote balanced fertiliser use and improve agricultural productivity.

●Support the growth of the domestic fertiliser industry. Alleviate the financial burden of subsidies on the government.

Coverage

●It provides subsidies on Phosphatic and Potassic (P&K) fertilisers but excludes Urea.

Management

●It is managed by the Department of Fertilisers under the Ministry of Chemicals & Fertilisers.

Budget 2021 provision

●An additional Rs 65,000 crore was allocated beyond the initial Rs 71,000 crore for FY 21, with nearly Rs 80,000 crore for FY 22.

Subsidy Structure

●A fixed subsidy amount is determined annually based on the nutrient content of each fertiliser grade.

Price control

●Urea remains the only fertiliser sold at a fixed price; the NBS allows flexibility for P&K fertilisers based on various economic factors.

●The Maximum Retail Price (MRP) for P&K fertilisers is set by manufacturers, considering domestic and international costs, inventory levels, and currency exchange rates.

Benefits

●Availability of fertilisers to farmers at subsidised, affordable and reasonable prices will be ensured.

●Rationalisation of subsidy on P&K fertilisers in view of recent trends in the international prices of fertilisers and inputs.

Implementation Strategy and targets

●The subsidy on P&K fertilisers will be provided based on approved rates for Rabi 2024 (applicable from 01.10.2024 to 31.03.2025) to ensure smooth availability of these fertilisers to the farmers at affordable prices.

PRACTICE QUESTION

Q.Consider the following statements regarding the “Nutrient Based Subsidy (NBS) scheme”:

1. It provides subsidies on Phosphatic and Potassic (P&K) fertilisers but excludes Urea.
2. The Maximum Retail Price (MRP) for P&K fertilisers is set by the union government.
3. The subsidy on P&K fertilisers have been recently discontinued.

How many of the above statements is/are correct?

A.Only one

B.Only two

C. All Three

D.None

Answer: A

Explanation:

Statement 1 is correct:

●The Nutrient Based Subsidy (NBS) scheme provides subsidised fertilisers to farmers in India.

●Launched in 2010, the scheme aims to ensure that farmers have access to fertilisers at affordable prices.

●Cabinet continued funding for the NBS was approved until 2019-20 to ensure availability of P&K fertilisers at controlled prices.

●It provides subsidies on Phosphatic and Potassic (P&K) fertilisers but excludes Urea.

Statement 2 is incorrect:

●Urea remains the only fertiliser sold at a fixed price; the NBS allows flexibility for P&K fertilisers based on various economic factors.

●The Maximum Retail Price (MRP) for P&K fertilisers is set by manufacturers, considering domestic and international costs, inventory levels, and currency exchange rates.

Statement 3 is incorrect:

●The subsidy on P&K fertilisers will be provided based on approved rates for Rabi 2024 (applicable from 01.10.2024 to 31.03.2025) to ensure smooth availability of these fertilisers to the farmers at affordable prices.