Nutrient Based Subsidy Scheme Current Affairs - 2019

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CCEA approves Nutrient Based Subsidy rates for P&K fertilizers

Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister has approved proposal for fixation of Nutrient Based Subsidy Rates for Phosphatic and Potassic (P&K) Fertilizers for the year 2019-20. This proposal was forwarded by Department of Fertilizers.

Nutrient Based Subsidy Rates 2019-20

Benefits: This will enable manufacturers and importers to formalize supply contracts for fertilizers and fertilizer inputs. It will make fertilizers available to farmers in year 2019-20.

Expenditure: The expected expenditure (during 2019-20 period) on releasing subsidy on P&K Fertilizers will be Rs. 22875.50crore.

Background: Union Government makes available Urea and 21 grades of P&K fertilizers to farmers at subsidized prices through fertilizer manufacturers/importers. This subsidy on P&K fertilizers is governed by Nutrient Based Subsidy (NBS) Scheme.

About Nutrient Based Subsidy (NBS)

Under it fixed amount of subsidy is decided by Government on annual basis and is provided on each grade of subsidized P&K fertilizers, except for Urea, based on the nutrient content present in them.

It was launched 2010. It is being implemented by Department of Fertilizers, under Ministry of Fertilizers.

Objectives: (i) Ensure sufficient quantity of P&K is available at farmer’s disposal at statutory controlled prices. (ii) Ensure balanced use of fertilizers for improving agricultural productivity, promoting growth of indigenous fertilizers industry and also reducing burden of subsidy

Features: It is largely meant for secondary nutrients like N, P, S and K and micronutrients which are very important for crop growth and development. It is implemented with expectation that it will promote balanced fertilization of soil, which will lead to increased agricultural productivity and consequently better returns to the farmers.

Significance: In India, urea is the only controlled fertilizer and is sold at statutory notified uniform sale price. NBS allows manufacturers, marketers, and importers to fix 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 and the exchange rates.

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.

Background

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.