Phosphatic and Potassic (P&K) Policy

• The Hon'ble Finance Minister in its Budget Speech 2009 announced for introduction of Nutrient Based Subsidy Policy for Phosphatic & Potassic fertilizers with the objective of ensuring Nation's food security, improving agricultural productivity and ensuring the balanced application of fertilizers. The Government introduced the Nutrient Based Subsidy (NBS) Policy w.e.f. 1.4.2010 in continuation of the erstwhile Concession Scheme for decontrolled P & K fertilizers (w.e.f. 1.5.2010 for SSP). The details of Nutrient Based Subsidy Policy are as under:
  • The subsidy on P&K fertilizers is announced by the Government on annual/ bi-annual basis before the beginning of each financial year/ cropping season. The subsidy is announced for each nutrient i.e. Nitrogen (N), Phosphorus (P), Potash (K) and Sulphur (S) on per kg basis which is converted into subsidy per ton depending upon the nutrient content in each grade of these fertilizers.
  • In order to overcome the deficiency of secondary and micronutrients in soil and to encourage their application along with primary nutrients, provision of additional subsidy on secondary and micro-nutrients has been made vide Notification dated 04.03.2010.
  • Presently, NBS is applicable on 28 Grades of P&K fertilizers including Di Ammonium Phosphate (DAP, 18-46-0), Muriate of Potash (MOP), Mono Ammonium Phosphate (MAP, 11-52-0), Triple Super Phosphate (TSP, 0-46-0), 3 grades of Single Super Phosphate (SSP, 0-16-0-11), Ammonium Sulphate (AS - (Caprolactum grade by GSFC and FACT), Potash Derived from Molasses (PDM) and 19 other grades of complex fertilizers.
  • Any variant of the subsidized P&K fertilizers covered under NBS Policy and are fortified/coated with Boron and Zinc, as provided for under FCO, are eligible for additional subsidy. Such fortified/coated grades of fertilizers will attract an additional per tonne subsidy of Rs. 300 per MT and Rs. 500 per MT respectively to encourage their application along with primary nutrients.
  • Under the NBS policy, the Government has constituted an Inter-Ministerial Committee (IMC) with Secretary (Fertilizers) as Chairman and Joint Secretary level representatives from Department of Agriculture and Farmers Welfare (DA&FW), Department of Expenditure (DOE), NITI Aayog and Department of Agricultural Research and Education (DARE).  This Committee recommends NBS rates for various nutrients i. e. N, P, K and S for taking the decision by the Government.
  • The IMC also recommends a per tonne additional subsidy on fortified subsidized fertilizers carrying secondary (other than 'S') and micro-nutrients. The Committee also considers and recommends inclusion of new fertilizers under the subsidy regime based on application of manufacturers/ importers and its need appraisal by the Indian Council for Agricultural Research (ICAR), for decision by the Government.
  • The basic principle adopted in fixation of subsidy rates for different nutrients is the identification of ‘International Import Prices’ of major consumed fertilizers i.e. Urea, DAP, MOP and Sulphur considering the annual / biannual average/current prices published in the Fertilizers Market Bulletin (FMB). Based on these import prices, the delivered prices of these fertilizers are determined after taking into account the prevailing exchange rate. The IMC also considers other relevant factors like requirement of nutrients in the country, balanced use of fertilizers, subsidy burden, MRP of fertilizers etc. while recommending the subsidy rates for different nutrients.
  • Distribution and movement of fertilizers along with import of finished fertilizers, fertilizer inputs and production by indigenous is monitored through the on-line web based "Integrated Fertilizer Monitoring System (iFMS)" (erstwhile FMS and mFMS).
  • The fertilizer companies are required to print Maximum Retail Price (MRP) along with applicable subsidy on the fertilizer bags clearly. Any sale above the printed MRP is punishable under the EC Act.
  • In addition to NBS, freight for the movement and distribution of the decontrolled fertilizers by rail and road is provided to enable wider availability of fertilizers in the country.
  • In order to examine the reasonableness of MRPs of P&K fertilizers, the companies shall continue to submit the certified cost data as per the requirement and directions of DOF from time to time. The companies shall also report MRPs of P&K fertilizers regularly to DOF.
  • Manufacturers of customized fertilizers and mixture fertilizers are eligible to source subsidized fertilizers from the manufacturers/ importers after their receipt in the districts as inputs for manufacturing customized fertilizers and mixture fertilizers for agricultural purpose. There is no separate subsidy on sale of customized fertilizers and mixture fertilizers.
  • The payment of subsidy to the manufacturers/importers of P&K fertilizers shall be released as per the procedure and terms and conditions mentioned in the Department Notification No. D(FA)/CCEA/2011 dated 25.10.2020 and D(FA)/2016/DBT dated 17.3.2017, as amended from time to time. 

Nutrient Based Subsidy Per Kilo Gram of Nutrients

Based on the recommendations of the Inter Ministerial Committee constituted under the Nutrient Based Subsidy Policy, the Government has allowed the per Kg NBS for 'N', 'P', 'K' & 'S' (Nitrogen, Phosphate, Potash and Sulphur) and the amount of subsidy per MT on the Phosphatic & Potassic fertilizers for 2014-15 to 2024-25 is as under:

(a) Per Kg NBS rates for nutrients N, P, K, and S for the 2015-16 to 2025-26:

(b) Per MT subsidy on different P&K fertilizers during 2015-16 to 2025-26:

*NA means not covered under NBS regime 

(c) An amount of Rs. 300 PMT and Rs 500 PMT additional subsidy is provided on subsidized P&K fertilizers fortified/coated with micronutrients namely Boron (B) and Zinc (Zn) respectively.