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GoI Plans to Roll Out PM-PRANAM Scheme to Reduce Usage of Chemical Fertilizers

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Govt to launch PM-PRANAM scheme soon to reduce chemical fertiliser use

The Government of India (GoI) intends to launch the Pradhan Mantri Promotion of Alternate Nutrients for Agriculture Management Yojana (PM PRANAM) to reduce the usage of chemical fertilizers.

  • The PM PRANAM Scheme is an initiative to promote using fertilizers in a balanced manner along with bio-fertilizers and organic fertilizers as alternative sources of nutrients.

The programme intends to lower the cost of subsidies for chemical fertilizers, which is projected to rise to Rs 2.25 lakh crore in 2022–23, a 39% increase from Rs 1.62 lakh crore in 2021–22.


The Ministry of Chemicals and Fertilizers proposed PM PRANAM, and the details of the proposed scheme were announced during the National Conference on Agriculture for the Rabi Campaign on September 7, 2022.

Need for Such a Scheme

i.The need for four fertilizers—Urea, DAP (di-ammonium phosphate), MOP (muriate of potash), and NPK (Nitrogen, Phosphorus, and Kalium [Potassium])—increased by 21%, from 528.86 lakh metric tonnes (LMT) in 2017–18 to 640.27 LMT in 2021–22.

ii.While the Maximum Retail Prices (MRPs) of non-urea fertilizers are set by the companies, the farmers purchase chemical fertilizers at MRPs that are significantly less than their usual supply-and-demand-based market rates or what it costs to produce/import them.

  • To ensure fair prices for these nutrients, GoI pays the difference between the two sums as a flat per-tonne subsidy money on certain nutrients.

Pradhan Mantri Promotion of Alternate Nutrients for Agriculture Management Yojana (PM PRANAM)

Functionality of the Scheme

  • GoI aims to determine a state’s use of chemical fertilizers in a given year by comparing its average consumption during the last three years.
  • This will be accomplished by using the data on the Integrated Fertilizers Management System (IFMS) dashboard of the Ministry of Chemicals and Fertilizers.

Funding Mechanism

i.The primary objective will be to pass 50 % of subsidy savings as a grant to the state that saves the money.

ii.In order to encourage the use of alternative fertilizers and their production at the village, block, and district levels, 70% of the grants would be utilized to construct assets.

iii.Farmers, Panchayats, Farmer Producer Organizations (FPOs), and Self-Help Groups (SHGs) that work to minimize fertilizer usage and raise awareness will receive the remaining 30% of the total grant.

Budgetary Support Provided by GoI for Fertilizer Subsidies

i.According to official data, the actual expenditure on fertilizer subsidies in 2020-21 was Rs. 1.27 lakh crore.

ii.The GoI budgeted Rs. 79,530 crore in the Union Budget 2021-22, which was increased to Rs. 1.40 lakh crore in the revised estimates (RE).

  • However, the total subsidy for fertilizer in 2021–22 reached Rs. 1.62 lakh crore.

iii.For the current fiscal year (2022-23), the GoI has set aside Rs. 1.05 lakh crore.

  • In 2022, the fertilizer subsidy figure is expected to surpass Rs. 2.25 lakh crore.

Other Initiatives by GoI Regarding Fertilizer Subsidies

i.GoI has implemented a Direct Benefit Transfer (DBT) mechanism in fertilizers w.e.f. October 2016 in order to plug leakage in fertilizer subsidies.

  • Under this system, fertilizer companies receive a 100% subsidy on various fertilizer grades based on actual sales made by retailers to beneficiaries.

ii.Furthermore, the GoI updated the Fertilizer Control Order (FCO) -1985 with new nutrients such as Nano Urea & “Bio-Stimulants”.

iii. Initiatives such as the Soil Health Card and neem-coated urea have also been launched.

Recent Related News:

In August 2022, the Ministry of Chemicals and Fertilizers has decided to implement the “One Nation One Fertilizer” initiative by introducing a “Single Brand for Fertilizers and Logo” under the “Pradhan Mantri Bhartiya Janurvarak Pariyojna (PMBJP) fertilizer subsidy scheme.

It has issued an order mandating all businesses to sell their products under the single brand name “Bharat” in order to achieve uniformity in fertilizer brands throughout India. Under the PMBJP scheme, the Central Government provides fertilizer subsidies on an annual basis.

About Ministry of Chemicals and Fertilizers:

Union Minister –  Mansukh Mandaviya (Rajya Sabha – Gujarat)
Minister of State (MoS) – Bhagwanth Khuba