13 March 2026·PIB

PM-PRANAM Scheme: Incentivising States/UTs to Reduce Chemical Fertilizer Use and Promote Sustainable Agriculture

In this note

1. At a Glance

PM-PRANAM = PM Programme for Restoration, Awareness Generation, Nourishment and Amelioration of Mother-Earth — a Centre-led scheme that financially incentivises States/UTs to cut chemical fertilizer consumption (Urea, DAP, NPK, MOP) and shift to alternatives. [1][2]
UPSC relevance: intersects GS-III (Agriculture, Subsidies, Environment) and GS-II (Centre-State fiscal federalism); ties into soil health, organic farming, and the fertilizer subsidy bill. [1]

13 March 2026: Union Minister of Chemicals & Fertilizers J.P. Nadda responded to Lok Sabha Starred Question No. 211 on PM-PRANAM, reiterating the incentive formula and reporting >21 lakh hectares covered under PKVY + MOVCDNER*. [1]
Renewed parliamentary scrutiny on whether states have actually accessed PM-PRANAM grants since CCEA approval (Jun 2023). [1][2]

28 June 2023: Cabinet Committee on Economic Affairs (CCEA) approved PM-PRANAM as part of a ₹3.7 lakh crore innovative scheme package for farmers. [2]
Built atop earlier soil/organic-farming initiatives: Soil Health Card (2015), Paramparagat Krishi Vikas Yojana – PKVY (2015-16), Mission Organic Value Chain Development for North Eastern Region – MOVCDNER (2015-16), Neem-Coated Urea. [3]
Driven by India's ballooning fertilizer subsidy (~₹2.5 lakh crore in FY23) and skewed N:P:K ratio caused by urea over-use. [2]

Full form: PM Programme for Restoration, Awareness Generation, Nourishment and Amelioration of Mother-Earth. [2]
Implementing Ministry: Ministry of Chemicals & Fertilizers — Department of Fertilizers (NOT Ministry of Agriculture). [1]
Eligible fertilizers tracked: Urea, DAP, NPK, MOP. [1]
Baseline: Average consumption of preceding 3 financial years. [1]
Incentive: 50% of subsidy savings of a State/UT in the FY transferred as Grant to that State/UT. [2]
Internal split: 70% of the grant for asset creation at village/block/district level for alternate fertilizers and production units; 30% for rewarding farmers, panchayats, FPOs, SHGs engaged in reduction. (Standard scheme architecture as per CCEA note.) [2]
Coverage: All States and UTs. [2]
No fresh fund allocation — financed entirely from subsidy savings of existing fertilizer schemes. [2]
Companion schemes: PKVY (all-India ex-NE) and MOVCDNER (NE states); together >21 lakh ha covered. [1][3]

Economic / Fiscal

Targets compression of the fertilizer subsidy bill, the second-largest subsidy after food. [2]
Creates a performance-linked transfer — novel in Indian federal finance, akin to 15th FC's performance grants. [2]

Environmental

Addresses soil degradation, eutrophication, and GHG emissions (N₂O from urea); promotes balanced NPK + organic/bio-fertilizers. [2]
Complements Mission Amrit Sarovar, Soil Health Card, and Natural Farming Mission. [3]

Administrative / Federal

Operationalises cooperative federalism: states retain autonomy over agricultural extension while Centre rewards outcomes. [2]
Risk: states with already-low fertilizer use (e.g., NE) have little marginal saving to claim — equity concern. [1]

Scientific / Technological

Pushes adoption of nano-urea, nano-DAP, bio-stimulants, PROM (Phosphate Rich Organic Manure). [2]

31 Oct 2025: Cumulative coverage — PKVY 16.90 lakh ha + MOVCDNER 2.36 lakh ha. [3]
13 Mar 2026: Lok Sabha reply by Min. J.P. Nadda confirming PM-PRANAM framework; >21 lakh ha total organic coverage reported. [1]
Ongoing rollout of Nano-Urea and Nano-DAP by IFFCO as substitute inputs feeding PM-PRANAM goals. [2]

PM-PRANAM approved by CCEA on 28 June 2023. [2]
Nodal ministry: Chemicals & Fertilizers → Dept. of Fertilizers (not Agriculture & Farmers' Welfare). [1]
Fertilizers monitored: Urea, DAP, NPK, MOP (four). [1]
Baseline: 3-year rolling average consumption. [1]
Incentive share to State: 50% of subsidy saved. [2]
Of the grant: 70% asset creation, 30% rewards to farmers/PRIs/FPOs/SHGs. [2]
No separate budget — funded from subsidy savings of existing schemes. [2]
PKVY launched 2015-16; MOVCDNER launched 2015-16 (NE focus). [3]
PKVY coverage as on 31.10.2025: 16.90 lakh ha; MOVCDNER: 2.36 lakh ha. [3]
Full form: Programme for Restoration, Awareness, Nourishment And Amelioration of Mother-Earth. [2]

GS-III — Agriculture (subsidies, MSP, public distribution), Environment (soil, sustainable agriculture), Indian Economy.
GS-II — Government policies for vulnerable sections; Centre-State financial relations.
Question stems: 1. "PM-PRANAM marks a shift from input subsidy to outcome-linked transfer. Examine its potential to rationalise India's fertilizer subsidy regime." (GS-III) 2. "Discuss how PM-PRANAM, PKVY and MOVCDNER together address the twin objectives of soil health restoration and fiscal sustainability." (GS-III) 3. "Performance-linked grants to States can deepen cooperative federalism but risk penalising structurally disadvantaged states. Critically analyse with reference to PM-PRANAM." (GS-II)

Nutrient Based Subsidy (NBS) regime — sets the subsidy on P&K fertilizers PM-PRANAM seeks to compress.
Neem-Coated Urea & Nano-Urea/Nano-DAP — technological substitutes.
Soil Health Card Scheme (2015) — diagnostic underpinning balanced fertilization.
PKVY & MOVCDNER — direct organic-farming companions.
National Mission on Natural Farming (NMNF) — adjacent push for chemical-free farming.
15th Finance Commission performance grants — comparable architecture of outcome-linked Centre-State transfers.
One Nation One Fertilizer (PMBJP/Bharat brand) — branding reform of subsidised fertilizers.
NPK use ratio imbalance — agronomic backdrop justifying PM-PRANAM.

Wrong ministry — it is Chemicals & Fertilizers, not Agriculture & Farmers' Welfare. [1]
Wrong launch year — approved 2023, not 2022 (Budget 2023-24 announcement era). [2]
Confusing PM-PRANAM with PM-KISAN, PM-KUSUM, or PMKSY — unrelated schemes despite "PM" prefix.
Assuming a fresh budgetary outlay — PM-PRANAM is funded from subsidy savings, not a new allocation. [2]
Mixing PKVY (pan-India ex-NE) with MOVCDNER (NE only) — they are geographically partitioned, not overlapping. [3]