Thursday, 11 Sep, 2025
By: Yash Gupte
Fertilisers are the additional products used in agriculture to enhance the productivity of crops. They are generally used for increasing the crop yield. Image Source: IANS
The central government has been focusing on minimizing the import of fertilisers and increasing the domestic production of fertilisers.
To enhance the supply of fertiliser services to farmers, the Department of Fertilizers (DoF) has adopted the Direct Benefit Transfer (DBT) programme for fertiliser subsidy payment. According to the DBT fertiliser scheme, fertiliser businesses receive a 100% subsidy on various fertiliser grades based on the actual sales that the retailers make to the beneficiaries. The central government is also taking a number of steps to ensure adequate availability of fertilisers in the country. The movement of all major subsidized fertilizers are monitored throughout the country by an on-line web based monitoring system called integrated Fertilizer Monitoring System (iFMS). Apart from this, the State Governments are regularly advised to coordinate with manufacturers and importers of fertilizers for streamlining the supplies through timely placement of indents for railway rakes.
Fertilisers are the additional products used in agriculture to enhance the productivity of crops. They are generally used for increasing the crop yield. Though the overuse of fertilisers is harmful for crops, they have a rapid effect on crops helping the farmers in increasing the produce. Fertilisers make plants more resistant to pests. Fertilisers improve the water holding capacity of the plants and increase root depth. Also, the phosphorous in the fertilisers plays a very important role. It helps in faster development of roots and formation of seeds in plants.
The chart below takes a look at the domestic production of fertilisers in India.
The Indian fertiliser market expanded by 22.6 percent during the course of the last five years, from 2016 to 2021. However, the country's output of fertilisers grew by a meagre 3.78 percent, increasing its dependence on imports, which surged by 48.22 percent in FY 2020–21 from FY 2016–17. With a share of 57 percent of all major fertilisers, urea is the most commonly used fertiliser in India (Urea, Di-ammonium Phosphate (DAP), Muriate of Potash (MOP) & Nitrogen, Phosphorous and Potassium (NPK).
The central government has been focusing on minimizing the import of fertilisers and increasing the domestic production of fertilisers. Five large-scale capacity fertiliser production plants (Ramagundam, 3 HURL Plants Gorakhpur, Barauni & Sindri and Matix) are planned by the government which will guarantee to decrease imports by 6.35 million tons. DAP is the major consumed fertilizer in India after Urea and NPK. According to reports, the sales of DAP fertilizers is increasing in India year over year and touched a level of 10.5 million tons in FY 2020-21, with the growth of around 19.3 percent in last 5 years. The production of DAP hit 3.8 million tons, with a 13.6 percent decline in growth over the previous five years, and imports touched 5.8 million tons, with an increase of 31.8 percent over those same five years. Raw material price, forex fluctuations, agro-climatic risks and retail price differential of P&K fertilizers are some of the factors responsible for low production of DAP in the country.
In a bid to reduce the usage of chemical fertilisers by incentivising states, the Narendra Modi government is planning to introduce a new scheme – PM PRANAM, which stands for PM Promotion of Alternate Nutrients for Agriculture Management Yojana. Through this scheme, the government will incentivise the states that use lesser amounts of chemical fertilisers in a particular year.
One of the primary objectives of the scheme will be minimising Union government's subsidy burden on chemical fertilisers. The subsidy burden on the center is estimated to increase by 39 percent from Rs 1.62 lakh crore last year to Rs. 2.25 lakh crore in 2022-2023.
Through PM-PRANAM, center will pass on 50 percent of subsidy savings as a grant to the state that saves the money. Out of this, the state governments are supposed to use 70 percent of the grant to create assets that would lead to technological adoption in alternate fertilisers and alternate fertiliser production units at district levels, blocks and villages.
The remaining 30 percent grant money can be used to reward and encourage farmers, panchayats, farmer producer organisations, and self-help groups involved in fertiliser reduction and awareness generation. The calculation of reducing chemical fertilisers will be compared to the average consumption of urea during the last three years.
