Fertilizer subsidy reform in India has focused on delivery mechanisms rather than pricing rationalization. Critically examine.

India's fertilizer subsidy, one of the largest items of central expenditure, has been reformed chiefly by re-engineering how the subsidy travels down the supply chain. The administered prices that actually drive farm-level nutrient use have largely been left untouched.

Delivery-side reform: substantial and verifiable gains

• DBT in Fertilizers: 100% subsidy is released to companies only on actual sales authenticated through Aadhaar-enabled PoS devices at each retail shop, shifting the payment trigger from dispatch to sale [1].
• iFMS enables real-time capture of stock, movement and retail transactions, allowing weekly claim generation and timely settlement — curbing diversion and black-marketing [1][2].
• One Nation, One Fertilizer (2022) imposed the uniform "Bharat" brand under PMBJP, reducing brand-driven confusion and standardising tracking [3].
• Implementation was administratively deep: about 1.8 lakh retailers sensitised across 4,630 training sessions during rollout [4].

Pricing rationalization: largely deferred

• Urea's MRP is statutorily fixed at ₹242 per 45-kg bag, unchanged since March 2018, irrespective of production cost [5]. Price is thus fully decoupled from scarcity or import parity.
• P&K fertilizers, by contrast, move under season-wise Nutrient-Based Subsidy rates (Rabi 2025-26 requirement ~₹37,952 crore) [6]. The resulting price wedge makes urea artificially cheap, skewing NPK ratios away from balanced fertilization and degrading soil health.
• Because DBT is a back-end model paying companies rather than farmers, it verifies the buyer but creates no incentive to economise on quantity — leakage is checked, over-application is not.
• Options such as extending NBS to urea, per-hectare subsidy caps, or soil-health-linked pricing remain untried at scale.

The criticism is therefore valid in emphasis but not in spirit: delivery reform was the necessary first stage, building the verified beneficiary data and real-time sales trail on which credible price reform must rest. The logical next step is to phase urea into a nutrient-based pricing framework and leverage iFMS for farmer-level, soil-test-linked support — aligning fiscal prudence with balanced fertilization and SDG-2.