The Nutrient-Based Subsidy regime was meant to correct nutrient imbalance in Indian soils. Assess its success and suggest reforms.

The Department of Fertilizers introduced the Nutrient-Based Subsidy (NBS) regime on 1 April 2010. It fixes a per-kg subsidy on N, P, K and S for decontrolled P&K fertilisers, with balanced fertilisation as its stated aim [1][2]. Sixteen years on, NBS has widened the range of nutrients farmers can get, but it has not corrected the imbalance.

Successes

• Nutrient-linked pricing: covers 28 grades; rates are revised each Kharif and Rabi in line with global prices [1].
• Secondary nutrients: Sulphur has its own rate (₹10.42/kg, Rabi 2026-27). A Sulphur package for domestic producers only, paying 20% of procurement cost, targets deficiency [1].
• More nutrient sources: freight subsidy for SSP as an alternative to DAP; Ammonium Sulphate promoted in place of urea [1].
• Farmer protection: DAP held at ₹1,350/bag; stocks of 235.21 lakh tonnes ahead of Rabi sowing [1].

Shortcomings

• Urea left outside: urea's price stays fixed while P&K prices float. This makes nitrogen, the overused nutrient, the cheapest choice [1][2].
• No road-map: CAG Report No. 16 of 2015 found no plan for reaching balanced use. The Department itself admitted that rising prices were causing imbalanced use [2]. There is still no target nutrient ratio [1].
• Skewed rates: K gets ₹2.38/kg against ₹94.21/kg for N, so the rates do little to encourage potash use [1].
• Price control creeping back: fixed-price cover now extends to TSP and imported MAP. The Rabi outlay of ₹62,370 crore is over 64% higher than the previous year [1]. Only about 40% of DAP is made in India [3].
• Leakages: CAG found costs wrongly loaded onto MRPs [2]. The Standing Committee (2026) flagged forced bundling at retail shops [4].

Reforms

• Bring urea into the same nutrient-pricing framework as P&K.
• Publish state-wise target N:P:K ratios with yearly milestones, linked to Soil Health Card data [2].
• Publish the cost formula behind the "reasonable MRP" test [2].
• Require separate digital billing of non-subsidised products and back it with retail inspections [4].
• Extend the domestic-only Sulphur model to phosphatic inputs to build DAP capacity [1][3].
• Use PM-PRANAM to reward states that cut excess chemical use.

Overall, NBS has the right design: it pays for nutrients, not products. Partial coverage and weak monitoring have blunted it. Bringing urea in, setting measurable targets and getting the subsidy to farmers intact can make NBS a real tool for soil health, in line with SDG 2.4 on sustainable agriculture.