Nutrient Based Subsidy (NBS) Scheme

Quick facts 

• Purpose: To provide fertilizers to the farmers at the subsidized prices. 
• Type: Central Sector scheme 
• Inter- Ministerial Committee (IMC): Recommends per nutrient subsidy for 'N', 'P', 'K' and 'S' before the start of the financial year.
• Freight concession: In addition to NBS, freight for the movement and distribution of the decontrolled fertilizers by rail and road is also provided

Objective

• Ensuring Nation's food security, improving agricultural productivity and ensuring the balanced application of fertilizers.

Salient Features 

Background: In 1992, Centre deregulated Phosphatic and Potassic (P&K) fertilizers, causing their prices to surge.  Consequently, farmers tended to overuse Nitrogen (N), whose price was still controlled. This created imbalance in soil nutrients (N, P, and K) leading to reduced soil productivity.  To address this, the Department of Agriculture & Cooperation introduced the Concession Scheme for decontrolled P&K fertilizers on an ad-hoc basis (from 1992 to 2010).  In 2010, the Government introduced NBS scheme.  NBS meaning: Instead of providing subsidies on fertilizers as a whole, subsidy is provided based on the contents of the nutrients like nitrogen, phosphorus, potash, and sulphur, which are critical for plant growth. An Inter- Ministerial Committee (IMC) recommends subsidy before the start of the financial year.  NBS is paid annually on each nutrient namely, 'N', 'P', 'K' and 'S' based on the recommendation of IMC. The IMC also recommends a per tonne additional subsidy on fortified subsidized fertilizers carrying secondary (other than 'S') and micro-nutrients. There is no separate subsidy on sale of customized fertilizers and mixture fertilizers. NBS subsidy payment  Subsidy for customized fertilizers: Manufacturers of customized fertilizers and mixture fertilizers are eligible to source subsidized fertilizers from the manufacturers/ importers. Direct Benefit Transfer (DBT): Subsidy is transferred to fertilizer companies through DBT, which is then passed on to farmers through reduced retail prices. Integrated Fertilizer Monitoring System (iFMS): It captures end to end details of Fertilizer in terms of Production, Movement, availability, requirement, Sale, Subsidy Bill Generation to Subsidy payment to fertilizer companies.