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Economic Survey highlighted issues in current design of fertiliser subsidy in India and recommends ways to improve it.
Current Design of Fertilizer Subsidy
- Union Government, based on recommended dose of nutrient data provided by states, calculates the Recommended Dose of Fertiliser (RDF) and allocates fertilisers to States for each season.
- States, in turn, sell the fertiliser to the farmers through dealers and primary agriculture cooperative societies using point of sale (POS) devices.
- Based on the quantity of fertilisers sold to farmers, the Department of Fertilisers pays fertiliser subsidies to the fertiliser companies.
Issues in Current System
- PoS devices not integrated with land records.
- Fertilizer can be purchased by anyone with Aadhaar, leading to misuse.
- No limits on quantity per person/family.
- Financial and ecological impacts due to overuse, non-agricultural use, and public resource wastage.
- Urea accounts for over 82% of nitrogenous fertilisers, leading to imbalanced NPK (nitrogen, phosphorus, and potassium ratios), from 4:3.2:1 in 2009-10 to 7:2.8:1 in 2019-20.
- This fertilizer consumption imbalance leads to Soil quality deterioration and health hazards.
Key Recommendations
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