The Nutrient Based Subsidy scheme has not delivered balanced fertilizer use because urea stays outside its ambit. Critically analyse.

The Nutrient Based Subsidy (NBS) scheme began on 1 April 2010. It links subsidy to the nutrient content of P&K fertilisers, while urea stays under the New Pricing Scheme [1]. Since then the N:P:K ratio has moved from 4:3.2:1 (2009-10) to about 10.9:4.1:1 (2023-24), against a recommended 4:2:1 [2]. The statement is therefore largely valid, but not the whole story.

How keeping urea out undermined NBS

• Price asymmetry: urea's MRP is fixed at ₹242 per 45 kg bag, while the bag actually costs about ₹2,200 [3]. P&K prices move with the market [1]. As P and K became costlier relative to urea, farmers used more nitrogen.
• Reform covered only half the market: urea makes up 82% of nitrogenous fertilisers [4]. The most used nutrient never came under nutrient-based pricing.
• No price signal behind "balanced use": the FY27 Budget cut the subsidy expecting balanced use. Yet the outgo may top ₹3 lakh crore against a Budget Estimate of ₹1.71 lakh crore, because a fixed MRP passes the whole global LNG and urea price shock to the Treasury [5].

Other causes besides urea's exclusion

• Leakage: the CAG found subsidised fertiliser diverted to non-farm use and smuggled from border districts. It also found a flawed need-assessment process [6]. These are governance failures, not NBS design flaws.
• Volatility on the P&K side: India imports P&K raw materials, so NBS rates must be reset every season, Kharif and Rabi [5]. This makes P&K prices less predictable for farmers.
• Weak farm-level uptake: advice based on soil testing has not changed fertiliser habits at scale, so subsidy design alone cannot correct the nutrient mix.

Verdict: keeping urea out is the main structural cause of the imbalance. Leakage, poor need estimates and weak extension made it worse.

Fixing the imbalance needs both price reform and better governance. The Economic Survey 2025-26 proposed raising urea prices gradually, with direct cash transfers that protect farmers' purchasing power and that also reach tenant farmers [2]. Nano urea, which a Parliamentary Standing Committee examined [4], and closing the CAG-flagged gaps [6] can bring urea fully into nutrient-based pricing. This would advance SDG 2 (zero hunger) and SDG 15 (life on land, including soil health).