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Nutrient Based Subsidy (NBS)

  • Context (PIB | TH | BS | DTE): GoI has approved Nutrient Based Subsidy (NBS) rates for Rabi Season 2023-24 on Phosphatic and Potassic (P&K) fertilisers.
  • GoI has lowered subsidy under the nutrient-based regime for nitrogen, phosphorus, potassium, and sulphur for the Oct-Mar period compared to the Apr-Sept period.


  • NBS scheme was launched on 2010 by the Department of Fertilisers, Ministry of Chemical and Fertilisers.
  • Under the NBS scheme, farmers ae provided subsidised fertilizers based on their nutrient content, namely, Nitrogen (N), Phosphate (P), Potash (K), and Sulphur (S).
  • Moreover, fertilizers fortified with secondary and micronutrients receive additional subsidy.
  • Objectives of NBS scheme:
    • To ensure nation’s food security
    • To improve agricultural productivity
    • To ensure the balanced application of fertilizers
  • Ambit of NBS: It covers all phosphatic and potassic (P&K) fertilisers except urea.

Issues with NBS Scheme

Increase in Imbalanced Use of Fertilisers

  • Urea is not included in the NBS; it remains under price control, and its MRP is officially fixed.
  • While there is no price control for fertilisers under the NBS scheme, their prices have increased.
  • All these have led the farmers to use more urea, worsening fertiliser imbalance.

Environmental and Economic Cost

  • Fertilizer subsidy is the second-biggest subsidy after food subsidy.
  • NBS-like schemes promote chemical fertilisers, damaging soil health and costing the economy.

Recommendations of CACP for the NBS Scheme

  • Bring Urea under the NBS scheme: To address the imbalanced use of fertilisers.
  • Capping the number of subsidised fertiliser bags per farmer: To reduce the GoI’s subsidy burden.

Commission for Agricultural Costs and Prices (CACP)

  • CACP was earlier called Agricultural Prices Commission till 1985.
  • It came into existence in 1965.
  • It is an attached office of the Ministry of Agriculture and Farmers Welfare, GoI.
  • It is mandated to recommend minimum support prices (MSPs).
  • As of now, CACP recommends MSPs of 23 commodities.
  • The recommendations of CACP are not legally binding on the GoI.

Fertilisers of India

  • India is the 2nd largest consumer of urea fertilisers after China.
  • India also ranks 2nd in the production of nitrogenous fertilisers and 3rd in phosphatic fertilisers.
  • The three basic fertilisers of India are Urea, Di Ammonium Phosphate (DAP), and Muriate of Potash (MOP).
  • Urea is India’s most consumed, produced, imported and regulated fertiliser.
    • Urea is subsidised only for agricultural uses.


Main Source

Nitrogen (N) Urea
Phosphorous (P) Di Ammonium Phosphate (DAP)
Potassium (K) Muriate of Potash (MOP)
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