🗞️ Why in News The Union Cabinet approved Nutrient Based Subsidy (NBS) rates for phosphatic and potassic (P&K) fertilisers for Kharif Season 2026 (April 1–September 30, 2026) at ₹41,533.81 crore — ₹4,317 crore higher than Kharif 2025 — ensuring affordable fertilisers for farmers ahead of the monsoon sowing season.
The fertiliser subsidy approval is a recurring pre-kharif policy action — but its scale (₹41,534 crore for just one season’s P&K fertilisers alone) reflects both the structural importance of subsidised inputs for Indian agriculture and the fiscal burden that open-ended subsidy commitments impose on the Union Budget.
Kharif 2026 Subsidy — Key Parameters
| Parameter | Value |
|---|---|
| Total NBS subsidy (Kharif 2026) | ₹41,533.81 crore |
| Kharif 2025 (previous year) | ₹37,216.15 crore |
| Increase | ₹4,317 crore (+11.6%) |
| Coverage period | April 1 – September 30, 2026 |
| DAP bag (subsidised price) | ₹1,350 per bag (maintained) |
| Fertilisers covered | Phosphatic (P) and Potassic (K) — 24 grades |
Understanding the NBS Scheme
What is NBS?
The Nutrient Based Subsidy (NBS) scheme, launched in April 2010, replaced the earlier product-based flat subsidy for phosphatic and potassic fertilisers with a nutrient-based model. Under NBS:
- Government fixes a per-kilogram subsidy for each nutrient (Nitrogen-N, Phosphorus-P, Potassium-K, Sulphur-S)
- Fertiliser companies price their products at market rates
- Government pays the subsidy directly to companies based on nutrient content of each product sold
What NBS Does NOT Cover — Urea
Urea is NOT under the NBS scheme. It is under a separate concession/flat-rate subsidy mechanism where:
- MRP of urea is fixed by government at ₹242 per 45-kg bag (unchanged since 2012)
- Full cost difference between production cost and MRP is reimbursed to manufacturers
- This makes urea the most heavily subsidised fertiliser — creating a structural imbalance in NPK use
The NPK Imbalance Problem
India’s ideal NPK ratio for soil health is 4:2:1 (Nitrogen : Phosphorus : Potassium). However, because urea (nitrogen) is dramatically cheaper than P&K fertilisers, farmers heavily over-apply urea:
- Actual NPK ratio used: Approximately 8-9:3:1 (nitrogen-heavy)
- Consequence: Soil degradation, declining organic carbon content, groundwater nitrate contamination, and declining fertiliser-use efficiency (more fertiliser needed per unit of yield)
The NBS scheme was intended to correct this by making P&K more affordable — but the gap between subsidised urea (₹242/bag) and subsidised DAP (₹1,350/bag) remains so large that the imbalance persists.
Key Fertilisers and Their Roles
| Fertiliser | Nutrient | Primary Kharif Use |
|---|---|---|
| Urea | 46% Nitrogen | Paddy, sugarcane, maize — basal and top-dressing |
| DAP (Di-Ammonium Phosphate) | 18% N + 46% P₂O₅ | Paddy, cotton, pulses — basal dose |
| MOP (Muriate of Potash) | 60% K₂O | Banana, potato, sugarcane |
| NPK complexes | Various ratios | Multiple crops |
| SSP (Single Super Phosphate) | 16% P + Sulphur | Oilseeds, pulses |
DAP is the most critical kharif fertiliser — it provides both nitrogen (for vegetative growth) and phosphorus (for root development and grain filling) in a single application at sowing. India imports ~50% of its DAP requirements.
India’s Fertiliser Import Dependence
| Fertiliser | Import dependence |
|---|---|
| DAP | ~50% from Saudi Arabia (SABIC), China, Jordan |
| MOP | ~100% — India has no potash reserves |
| Urea | ~15–20% (natural gas feedstock constrains domestic production) |
This import dependence exposes India to global price volatility — the 2021–22 fertiliser price shock (triggered by Russia-Ukraine war cutting off potash and urea supplies) cost India an additional ₹50,000+ crore in subsidy payments as global prices doubled.
India’s Response — Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM)
PM KUSUM promotes solar-powered irrigation pumps — indirectly reducing fertiliser misuse by enabling precision irrigation that improves nutrient-use efficiency.
Nano Urea — A Disruptive Alternative?
IFFCO’s Nano Urea (liquid, 500 ml bottle replaces one 45-kg bag) received government promotion as a way to reduce urea consumption. However, independent agronomic data on yield equivalence remains mixed — its large-scale adoption remains in question.
UPSC Relevance
GS3 (Agriculture): NBS scheme mechanics, fertiliser subsidy burden, NPK imbalance, soil health, India’s food security architecture.
Key themes for Mains:
- Why does India’s fertiliser policy perpetuate nutrient imbalance despite NBS?
- How can India reduce fertiliser import dependence? (domestic phosphate/potash reserves negligible)
- Direct Benefit Transfer for fertilisers — DBT pilot has been run; challenges of ensuring farmer-level targeting
- Soil Health Cards — scheme to guide farmers on optimal fertiliser use; effectiveness
📌 Facts Corner — Knowledgepedia
Kharif 2026 Subsidy:
- Total: ₹41,533.81 crore | Period: April 1 – September 30, 2026
- Increase over Kharif 2025: ₹4,317 crore | DAP price maintained: ₹1,350/bag
NBS Scheme:
- Launched: April 2010 (replaces flat P&K subsidy)
- Covers: 24 grades of P&K fertilisers | Does NOT cover urea
- Subsidy paid: Per kg of nutrient (N, P, K, S) — to fertiliser companies
Urea (NOT under NBS):
- MRP fixed: ₹242 per 45-kg bag (unchanged since 2012)
- Full difference between MRP and cost reimbursed to manufacturers
NPK Imbalance:
- Ideal: 4:2:1 (N:P:K) | Actual usage: ~8-9:3:1 (nitrogen-heavy)
- Cause: Extreme price gap between urea (₹242/bag) and DAP (₹1,350/bag)
India’s Import Dependence:
- DAP: ~50% imported | MOP: ~100% imported | Key suppliers: Saudi Arabia, China, Jordan, Canada (potash)
Related Schemes:
- Soil Health Card Scheme (2015): Nutrient analysis + fertiliser recommendations for each plot
- PM PRANAM: Promotes alternative fertilisers + reduced chemical fertiliser use
- Nano Urea (IFFCO): 500 ml liquid bottle; govt promoted alternative to bag urea
