Economic Survey 2023-24 recommends sustainable fertiliser subsidy Mechanism

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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.

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.

Improving Fertilizer targeting using Agri Stack, a digital platform to integrate stakeholders and improve agricultural outcomes.
- Ensuring subsidised fertilisers are sold to identified farmers based on land ownership and crops.
- Deciding adequate quantity based on parameters like land and crop data; etc.
Promoting use of E-RUPI, a seamless one-time payment mechanism can provide the necessary subsidy to the farmer directly.