Nutrient-Based Subsidy (NBS) Rates for Rabi Season

The Department of Fertilizers' proposal to fix the rates of Nutrient Based Subsidy (NBS) on Phosphatic and Potassic (P&K) fertilizers for the Rabi Season 2023-24 has been approved by the Union Cabinet. 

• The NBS expenditure for the upcoming Rabi season is expected to be around Rs. 22,303 crore.
• The government will provide subsidies on P&K fertilizers based on approved rates for Rabi 2023-24 to ensure affordable prices and easy availability for farmers.

About Nutrient-Based Subsidy (NBS)

• The government is offering 25 grades of P&K fertilizers to farmers at subsidized prices through authorized fertilizer manufacturers and importers. The subsidy on P&K fertilizers has been regulated by the NBS Scheme since April 1, 2010. 
• As part of its farmer-friendly approach, the government is dedicated to ensuring that P&K fertilizers are available to farmers at affordable prices. 
• Considering the recent trends in the international prices of fertilizers and inputs such as Urea, DAP, MOP, and Sulphur, the government has decided to approve the NBS rates for Rabi 2023-24 from October 1, 2023, to March 31, 2024, on Phosphatic and Potassic (P&K) fertilizers. 
• The approved and notified rates will be provided as subsidies to the fertilizer companies so that fertilizers can be made available to the farmers at reasonable prices.

Benefits of Nutrient-Based Subsidy (NBS)

The government will ensure the availability of fertilizers to farmers at subsidized and reasonable prices and rationalize subsidies on P&K fertilizers in view of international fertilizer and input prices.

About Fertiliser Subsidy

• A fertilizer is a natural or artificial substance that contains chemical elements like Nitrogen (N), Phosphorus (P), and Potassium (K) which are beneficial for plant growth and productivity. 
• In India, there are three primary types of fertilizers: Urea, DAP, and Muriate of Potash (MOP).
• The government provides a subsidy to fertiliser manufacturers to enable farmers to purchase fertilisers at prices lower than the market rates. The subsidy amount is the difference between the cost of production or import of the fertilizer and the actual price paid by farmers, which is borne by the government.
• Urea Subsidy: Urea is the most commonly produced, imported, consumed, and physically regulated fertilizer in India. It is only subsidized for agricultural purposes. 
  • To ensure that the fertilizer is available at an affordable rate, the government provides a subsidy to the manufacturers based on the cost of production at each plant. 
  • The manufacturers are then required to sell the fertilizer at the Maximum Retail Price (MRP) set by the government.
• Non-Urea fertilizers Subsidy: The Maximum Retail Prices (MRPs) for non-urea fertilisers are either fixed or decontrolled by the companies. 
  • Currently, all fertilisers that are not made from urea are regulated under the Nutrient Based Subsidy (NBS) Scheme. Eg. of  Non Urea Fertlizers are DAP and MOP.