Fertilizer Sector Current Affairs

CCEA approves continuation of Nutrient Based Subsidy and City Compost Scheme

The Cabinet Committee on Economic Affairs (CCEA) has approved for continuation of Nutrient Based Subsidy (NBS) Scheme and City Compost Scheme beyond 12th Five Year plan till 2019-20. The proposal was forwarded by Department of Fertilizers.

Key Facts

The total expenditure for continuation of both schemes till 2019-20 will be Rs. 61,972 crore. The expenditure will be on actual basis since national roll out of DBT entails 100% payment of subsidy to fertilizer companies on sale of fertilizers to farmers at subsidized rates.

The subsidy on Phosphatic and Potassic (P&K) fertilizers and Market Development Assistant (MDA) on City Compost will be provided on subsidy rates approved by CCEA on annual basis. The continuation of both schemes will ensure that adequate quantity of P&K is made available to farmers at statutory controlled price.


Government is making available fertilizers, namely Urea and 21 grades of P&K fertilizers to farmers at subsidized prices through fertilizer manufacturers and importers. The subsidy on P&K fertilizers is being governed by NBS Scheme which was launched in 2010.Its objectives are to foster balanced use of fertilizers to improve soil health and reduce government outgo on fertiliser support (subsidy).

Similarly, MDA is being governed by City Compost Scheme which was launched in 2016. City Compost Scheme  aims to convert all organic waste generated in cities into compost or biogas and market the compost with the help of fertiliser companies to benefit farmers.


CCEA approves amendment to New Urea Policy-2015

The Cabinet Committee on Economic Affairs (CCEA) has given its approval for amendment in Para 5 of New Urea Policy (NUP), 2015.

The amendment is related to the production beyond Re-Assessed Capacity (RAC) and inclusion of Para 8 in NUP 2015 to protect the production beyond RAC by urea units and boost indigenous urea production in the country.

Key Facts
  • It also raises ceiling imposed on production beyond RAC during the year 2016-17 to enable all urea unit to produce additional production which otherwise were not able due to low Import Parity Price (IPP).
  • Further, Department of Fertilizers has been authorized to take appropriate decision in consultation with Department of Expenditure to address any future fluctuation in IPP that would have adverse impact on the production beyond RAC by urea units.
New Urea Policy 2015 
  • It was notified in May 2015 with the objective of maximising indigenous urea production, promoting energy efficiency in the urea units and rationalizing the subsidy burden on the Government.
  • Under it, it is mandatory for all the indigenous urea producers to neem coat 100% of their urea production with the objective of increase Nitrogen Use Efficiency, promote balanced use of fertilizers and prevent diversion of urea for purpose other than agriculture.