PM-PRANAM

Indian Economy glossary

Also called: PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth · Topic: Land Reforms, the Green Revolution and Farm Subsidies · NCERT: Beyond NCERT

Meaning

PM-PRANAM (PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth) is a scheme launched in 2023. It gives a State 50% of the fertiliser subsidy it saves when it cuts chemical fertiliser use below its previous three-year average.

It matters because it gives States a money reason to fix India's overuse of fertiliser, especially urea. It promotes sustainable fertiliser use and helps restore soil health across States.

Core rule: Reward to State = 50% × (subsidy saved by using less chemical fertiliser than the previous three-year average)

Explanation

How it works

  • Step 1: fix a baseline. The baseline is the State's average chemical fertiliser use over the previous three years.
  • Step 2: compare. This year's use is checked against the baseline.
  • Step 3: work out the saving.
  • If use is lower, the Centre spends less on fertiliser subsidy (the money the government pays so that farmers can buy fertiliser cheaply).

  • That unspent amount is the "subsidy saved".

  • Step 4: share it. 50% of the saving goes to the State.

  • Who gets the reward: the State, not individual farmers. It is a reward for States, not a payment to farmers.

Worked example (made-up numbers, only to show the method)

  • A State's average urea use over the previous three years = 10 lakh tonnes.
  • This year it uses 9 lakh tonnes. So it uses 1 lakh tonnes less.
  • Suppose the subsidy on each tonne is ₹X. Then the Centre saves 1 lakh × ₹X.
  • The State gets 50% of this saving, i.e. 50,000 × ₹X.
  • If use goes above the baseline, nothing is saved and the State gets no reward.

Why the scheme was needed

  • Cheap urea leads to overuse.
  • Urea has a fixed MRP (maximum retail price set by the government) of ₹242 per 45 kg bag, and the government has said it has no plan to raise it.
  • P and K fertilisers (DAP, MOP) come under NBS (Nutrient Based Subsidy: a fixed subsidy per kg of nutrient, with prices partly left to the market).

  • When world prices rise, DAP and potash cost more but urea does not. So urea is the cheapest nutrient, and farmers use too much of it.

  • The NPK mix is skewed. The NPK ratio is the ratio of nitrogen (N), phosphorus (P) and potassium (K) put on the soil. India uses about 9.8 : 3.7 : 1, while the recommended mix is 4 : 2 : 1.

  • The damage.
  • Too much nitrogen with little P, K or organic matter causes soil mining: the soil runs short of micronutrients such as zinc, sulphur and iron, and yields stop responding to extra fertiliser.
  • Box 2.6 of NCERT makes the same point. Cheap fertiliser leads to overuse, and overuse harms the environment.

What makes the reward rise or fall

  • It rises when States:
  • push soil-test-based doses using Soil Health Cards;
  • promote INM (Integrated Nutrient Management: mixing farmyard manure, compost, biofertilisers and crop residues with the recommended chemical doses);

  • spread natural farming and alternative nutrients.

  • It falls (or is zero) when:

  • the cultivated area or cropping intensity goes up and more fertiliser is needed;
  • the price signal keeps rewarding urea use every season.

In India

  • Where it sits: PM-PRANAM is one of the reforms to the fertiliser subsidy, along with:
  • neem-coated urea (fully mandated in 2015);
  • DBT in fertilisers (rolled out nationwide in 2018);

  • nano urea (launched by IFFCO in 2021; whether it works is debated).

  • Federal design:

  • Agriculture is a State subject (Entry 14, List II, Seventh Schedule).

  • The Centre cannot order States or farmers to use less fertiliser. So it offers a reward and lets States act.

  • How the cut can be measured:

  • Under DBT in fertilisers, subsidy is paid to companies only on actual sales.
  • Each sale is recorded with Aadhaar on a PoS (point-of-sale) machine at the shop.

  • So sales data by district and by State already exists.

  • Link with Khet Bachaao Abhiyaan (KBA), Rabi 2026:

  • KBA is the Agriculture Ministry's outreach campaign on soil health and balanced fertiliser use (22 Oct – 30 Nov 2026).
  • It tells States to focus on 100 high fertiliser-consuming districts.

  • States can use these districts as the first targets for PM-PRANAM savings. KBA gives the advice, and PM-PRANAM is the money lever behind it.

  • Size of the subsidy at stake: the P&K subsidy (NBS) alone needs about ₹37,952 crore for Rabi 2025-26, not counting urea.

Don't confuse with

  • Nutrient Based Subsidy (NBS, 2010): NBS sets the subsidy per kg of nutrient for P and K fertilisers, and urea is outside it. PM-PRANAM does not change any fertiliser price or subsidy rate. It only rewards States for using less.
  • PM-KISAN (2019): PM-KISAN pays farmers (landowners) ₹6,000 a year as direct income support. PM-PRANAM pays States a share of the subsidy they save.
  • Soil Health Card scheme (2015): this is a tool. Each card tests 12 parameters and gives fertiliser advice for the field. PM-PRANAM is an incentive that rewards the result, i.e. less fertiliser used.
  • Khet Bachaao Abhiyaan: KBA is a time-bound campaign with no statute and no separate outlay. PM-PRANAM is a scheme with a fixed formula for sharing the money saved.

Prelims Hooks

  • PM-PRANAM was launched in 2023. It stands for PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth.
  • Reward rule: States get 50% of the fertiliser subsidy they save.
  • Baseline: the State's previous three-year average use of chemical fertiliser, not a fixed national target.
  • Beneficiary trap: "PM-PRANAM pays farmers directly for using less urea" is FALSE. The reward goes to States/UTs.
  • Price trap: "PM-PRANAM brings urea under NBS" is FALSE. Urea is still sold at a statutory MRP (₹242 per 45 kg bag).
  • Context figure: India's NPK use is about 9.8 : 3.7 : 1, against the recommended 4 : 2 : 1.

Mains Points

  • An incentive versus a price signal:
  • PM-PRANAM rewards States for cutting use, but the cheap fixed price of urea keeps pushing farmers the other way every season.
  • The Standing Committee on Chemicals and Fertilizers (2020) found that the subsidy led to overuse, imbalanced use and soil damage.
  • In December 2025 the Committee asked for a roadmap to fix urea's price relative to other fertilisers.

  • Answer line: PM-PRANAM works best alongside gradual price reform, not in place of it.

  • Cooperative federalism in a State subject:

  • Agriculture is a State subject, so the Centre shares savings instead of giving orders.
  • States gain a fiscal reason to fix extension, soil testing and INM.

  • Weak delivery can undo this. In a 2025 CAG audit in Madhya Pradesh, only 48% of Soil Health Card holders applied the recommended dose.

  • Measure outcomes, not activity:

  • DBT PoS sales data lets the government check real cuts district by district.
  • Risk: use can also fall because of drought or less area sown, not better practice. A State could then be rewarded for a fall it did nothing to cause.
  • So the savings should be checked against cropped area and yields, to make sure soil health and food output are not harmed.

Read more