Context:The Cabinet Committee on Economic Affairs has recently  given its approval for fixation of Nutrient Based Subsidy (NBS) rates for Phosphatic And Potassic (P&K) Fertilizers for the year 2020-21.

More about the news:

  • Expenditure:
    • The expected expenditure for release of subsidy on P&K Fertilizers during FY21 will be Rs. 22,186.55 crore.
  • New Addition in NBS scheme
    • The CCEA also recently approved the inclusion of a complex fertilizer namely Ammonium Phosphate (NP 14:28:0:0) under the NBS Scheme.
  • Aimed at Fertiliser companies:
    • The subsidy on the P&K will be provided on the subsidy rates approved by the CCEA to the fertilizer companies.
    • The subsidy would be released to fertilizer companies as per new rates so that they can make available fertilizers to farmers at a cheaper price than it would have been otherwise.
  • The approved rates for NBS for FY21 are as under:

About Nutrient Based Subsidy (NBS)

  • The NBS Scheme for fertilizer was initiated in the year 2010 and is being implemented by the Department of Fertilizers.
  • Under the scheme the government is making available fertilizers, Urea and 21 grades of P&K fertilizers to farmers at subsidized prices through fertilizer manufacturers/importers.
  • As part of the scheme a fixed amount of subsidy decided on an annual basis is provided on each grade of subsidized Phosphatic and Potassic (P&K) fertilizers, except for Urea based on the nutrient content present in them.
  • It is largely for secondary nutrients like N, P, S and K and micronutrients which are very important for crop growth and development.


Fertiliser Pricing in India

  • In India currently urea is the only controlled fertilizer and is sold at a statutory notified uniform sale price.
  • Nutrient Based Subsidy (NBS) allows manufacturers, marketers, and importers to fix the Maximum Retail Price (MRP) of Phosphatic and Potassic (P&K) fertilizers at reasonable levels.
  • This MRP is decided considering 
    • Domestic and international prices of P&K fertilizers
    • Inventory level in the country 
    • The exchange rates