The Nutrient Based Subsidy scheme was intended to promote balanced fertilisation, yet soil-nutrient imbalance persists. Critically examine.

Introduced on 1 April 2010, the Nutrient Based Subsidy (NBS) scheme fixes subsidy per nutrient (N, P, K, S), not per product, and lets companies set MRPs, so that farmers would apply nutrients in balanced proportions [2]. It met its fiscal aims but has fallen short on soil health.

Where NBS has delivered

• Fiscal containment: CAG found the subsidy outlay fell after NBS began [2].
• Wider choice: the subsidy covers 28 grades, including DAP and NPKS complexes [1].
• Shock absorption: the Rabi 2026-27 outlay of Rs.62,370.02 crore, about 64% above Rabi 2025-26, keeps P&K affordable at sowing despite high global DAP, MOP and sulphur prices [1].

Why imbalance persists

• Worsening ratio: NPK use reached 8.2:3.2:1 in 2012-13 against the 4:2:1 norm. This is worse than 6:1.9:1 in the early 1970s [3].
• Urea-P&K price gap: urea stays price-controlled outside NBS, while P&K MRPs are decontrolled [1][2]. When P&K prices rise, cheap urea replaces DAP and MOP, tilting use towards nitrogen.
• Weak design oversight: CAG found no clear road map for NBS objectives and no system to check whether company MRPs were reasonable [2].
• Retail leakage: the Standing Committee on Chemicals and Fertilizers (2026) flagged forced bundling, which has been met only with advisories and raises farmers' real cost [4].
• Import dependence: dependence of around 90% for phosphates and 100% for potash makes P&K supply and prices volatile [2].

Critical nuance: imbalance is state-specific. Twelve major states actually under-use nitrogen, and the 4:2:1 norm itself lacks a sound scientific basis [3]. A uniform national price lever cannot fix local deficits.

Way forward

• Narrow the urea-P&K price gap by moving urea towards nutrient-based pricing.
• Audit company costs before raising rates [2], and amend the Fertilizer (Control) Order, 1985 to penalise bundling [4].
• Tie nutrient advice to Soil Health Card results.
• Raise domestic P&K production to cut imports [5].

NBS got the price signal partly right but left urea, cost checks and local soil needs outside its design. Pairing it with urea reform, cost audits and soil-test-based advice would let it deliver balanced fertilisation, advancing SDG 2 (Zero Hunger) and sustainable soil use.