Nutrient-Based Scheme Allocations
- The Nutrient Based Subsidy Scheme (NBS) enables producers, marketers, and importers to set fair MRPs for Phosphatic and Potassic (P&K) fertilizers.
- The MRP is determined by considering the local and foreign costs of P&K fertilizers, the country’s inventory levels, and the currency exchange rate.
Benefits and Aim of Urea Subsidy
A farmer gets a fertilizer subsidy if they buy the product at a price lower than the MRP (Maximum Retail Price), which means that the price is lower than the average demand-and-supply rate or the typical cost of production and import. Even though the farmer is the one who eventually benefits, the fertilizer subsidy is given to the corporation that makes fertilizer.
A sharp increase in the global prices of urea, di-ammonium phosphate (DAP), and muriate of potash (MoP) in the last year may cause India’s fertilizer subsidy costs to reach Rs 2 trillion in 2022-23, according to a statement made by an official in the fertilizer ministry.
Compared to a smaller range of about ‘70,000-80,000 crore in the preceding few years, the annual budget expenditure on fertilizer subsidy will be much more than the mark of Rs 1 trillion in 2022-23. This will be the third year in a row that this will be the case.