1.11.3. Integrated Nutrient Management

Over 80% of India’s Urea requirements are met from domestic production but we are largely dependent on foreign imports for meeting requirements of potassic (K) and phosphatic (P) fertilizers. Over-use of nitrogenous and limited use of P and K fertilizers are matters of great concern and need appropriate price incentives by reducing fertilizer subsidies so that sustainable practices are encouraged.

The government has notified the New Investment Policy 2012 (NIP-2012) in the urea sector which will encourage investments leading to increase in indigenous capacities, reduction in import dependence and savings in subsidy due to import substitution at prices below import parity price. Under the Nutrient Based Subsidy (NBS) scheme for phosphatic and potassic (P&K) fertilizers implemented in 2010, a fixed amount of subsidy, decided on annual basis, is provided to each grade of P&K fertilizer, depending upon its nutrient content. An additional subsidy is also provided to secondary and micro-nutrients. Under this scheme, manufacturers/marketers are allowed to fix the maximum retail price (MRP).