NBS Subsidy Rates: The 2025-26 Rabi Provisions & DAP Hike for UPSC
Q. With reference to the Nutrient-Based Subsidy (NBS) Scheme in India, consider the following statements:
1. It applies to both Nitrogenous (Urea) and Phosphatic & Potassic (P&K) fertilizers.
2. The subsidy is determined based on the nutrient content rather than the specific grade of the fertilizer.
3. The Integrated Fertilizer Management System (iFMS) is used for real-time tracking of fertilizer movement and stock.
Which of the statements given above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Context
The Government of India has approved the Nutrient-Based Subsidy (NBS) rates for the Rabi 2025–26 season. Effective from October 1, 2025, to March 31, 2026, the updated rates aim to ensure the affordable availability of Phosphatic and Potassic (P&K) fertilizers to farmers while promoting balanced soil nutrition.
What is the Nutrient-Based Subsidy (NBS) Scheme?
Launched on April 1, 2010, the NBS scheme represents a policy shift where subsidies are determined based on the nutrient content (Nitrogen, Phosphorus, Potash, and Sulphur) rather than the weight of the fertilizer product.
Key Objectives:
- Soil Health: Addresses nutrient imbalance caused by skewed fertilizer usage.
- Affordability: Ensures fertilizers are available at fair and subsidized prices.
- Innovation: Encourages the introduction of advanced and micronutrient-enriched products.
- Decontrolled Regime: P&K fertilizer prices are decontrolled, allowing companies to fix the Maximum Retail Price (MRP) at reasonable levels subject to government oversight.
Rabi 2025-26: Key Highlights
The government has allocated a tentative budget of ₹37,952.29 crore for this season, which is approximately ₹736 crore higher than the Kharif 2025 requirement.
Subsidies for Primary Nutrients (per kg):
- Nitrogen (N): ₹43.02
- Phosphate (P): ₹47.96
- Potash (K): ₹2.38
- Sulphur (S): ₹2.87
DAP Subsidy Hike:
The subsidy for Di-Ammonium Phosphate (DAP) has been significantly enhanced to ₹29,805 per metric tonne, up from ₹21,911 per metric tonne in Rabi 2024-25.
Expanding Choices and Fortification
Until recently, the scheme covered 25 P&K grades. This has now expanded to 28 grades, including new additions like:
- NPK (11:30:14) fortified with Magnesium, Zinc, Boron, and Sulphur.
- Urea-SSP (5:15:0:10) complex.
- SSP (0:16:0:11) fortified with micronutrients.
Fortification Bonus:
To encourage the use of secondary nutrients, additional subsidies are provided for fortified fertilizers:
- Boron (B): ₹300 per Metric Tonne (MT)
- Zinc (Zn): ₹500 per Metric Tonne (MT)
Impact and Governance
Production & Yield:
- Domestic Output: P&K fertilizer production grew by over 50% from 112.19 LMT in 2014 to 168.55 LMT by late 2025.
- Agricultural Productivity: Foodgrain yields increased from 1,930 kg/ha (2010-11) to 2,578 kg/ha (2024-25).
Monitoring Mechanisms:
- iFMS (Integrated Fertilizer Management System): A digital platform for real-time tracking of fertilizer distribution, dealer registration, and stock availability.
- Profit Caps: Profit margins are regulated at 8% for importers, 10% for manufacturers, and 12% for integrated manufacturers.
- Transparency: Each bag must display the MRP and the applicable subsidy per bag and per kg.
🎯 Analysis & Insights
Prelims mastery
Correct Answer: (b) 2 and 3 only.
Reasoning: Statement 1 is incorrect because Urea (Nitrogenous fertilizer) is NOT covered under the NBS scheme; it is under a separate price control regime. Statements 2 and 3 are correct as NBS links subsidy to N, P, K, and S content, and iFMS is the digital backbone for monitoring.
Mains perspective
"The shift towards Nutrient-Based Subsidy (NBS) is a critical step towards precision agriculture and soil health management in India." Critically analyze the impact of the NBS scheme on India's agricultural productivity and fiscal responsibility. (150 words)