Nutrient-Based Subsidy (NBS): Promoting Balanced and Sustainable Agriculture
Learn about the Nutrient-Based Subsidy (NBS) Scheme 2025–26 — India’s fertiliser policy promoting balanced fertilisation, soil health, and farmer welfare through fixed nutrient-based subsidies.
Nutrient-Based Subsidy (NBS) Scheme 2025–26
Context
The Union Cabinet has approved the Nutrient-Based Subsidy (NBS) rates for Phosphatic and Potassic (P&K) fertilisers for the Rabi season 2025–26 (October 1, 2025, to March 31, 2026). This decision is crucial for maintaining soil health, ensuring the affordability of fertilisers for farmers, and supporting agricultural productivity during India’s key cropping season.
What is the Nutrient-Based Subsidy (NBS)?
The Nutrient-Based Subsidy (NBS) is a strategic policy mechanism introduced by the Government of India to rationalise fertiliser subsidies and encourage the balanced application of plant nutrients. Unlike a blanket subsidy on fertiliser bags, the NBS framework provides fixed subsidies per kilogram of specific nutrients—Nitrogen (N), Phosphorus (P), Potash (K), and Sulphur (S)—contained in fertilisers.
Key Features of NBS:
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Subsidy on Nutrients (₹ per kg):
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Nitrogen (N): ₹43.02
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Phosphorus (P): ₹47.96
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Potash (K): ₹2.38
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Sulphur (S): ₹2.87
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Freedom to Manufacturers/Importers: Fertiliser companies can determine the Maximum Retail Price (MRP) based on market conditions. The government reimburses the fixed nutrient subsidy directly to the companies, ensuring that final retail prices remain affordable for farmers.
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Objective: To promote balanced fertilisation and efficient nutrient use while reducing the overdependence on heavily subsidised urea, which is not covered under the NBS scheme.
Why is the Nutrient-Based Subsidy Important?
1. Promotes Balanced Fertilisation
For decades, Indian agriculture has relied excessively on urea due to its high subsidy and low price. This overuse of Nitrogen (N) has disturbed the N:P:K ratio, deteriorating soil health and reducing yield quality. NBS encourages the use of Phosphorus, Potash, and Sulphur, helping farmers restore soil nutrient balance and increase long-term productivity.
2. Ensures Affordability and Farmer Welfare
By offering a direct nutrient subsidy, NBS ensures that complex fertilisers such as Di-Ammonium Phosphate (DAP) and NPK blends remain within reach of small and marginal farmers. This protects farmers from global price volatility and ensures a steady supply of essential inputs during the sowing season, thereby supporting food security and farmer income stability.
3. Rationalises Government Expenditure
NBS links the subsidy to the actual quantity of nutrients sold rather than the type of fertiliser, allowing better fiscal management. This transparent mechanism ensures that government spending is predictable, controlled, and targeted towards nutrient efficiency, reducing leakage and over-subsidisation.
4. Encourages Private Sector Participation
The policy framework gives greater freedom to fertiliser manufacturers, enabling innovation in product formulation and marketing. By allowing market-based MRP determination, the scheme fosters competition, efficiency, and quality assurance in the fertiliser industry.
5. Supports Sustainable Agriculture and Environmental Goals
Balanced fertilisation leads to improved soil microbial activity, better nutrient uptake, and lower greenhouse gas emissions. By discouraging excessive urea use, NBS helps mitigate environmental degradation caused by nitrate leaching and water contamination, aligning with India’s sustainable agriculture and climate goals.
Fiscal and Food Security Implications
The NBS rates approved for Rabi 2025–26 will ensure the availability of P&K fertilisers at affordable prices during the crucial sowing season. This move reflects the government’s commitment to farmer welfare, soil health, and food security, while maintaining a balance between fiscal prudence and agricultural productivity.
The policy also supports the broader goals of Atmanirbhar Bharat (self-reliant India) by promoting domestic production and reducing dependency on imported fertilisers.
Conclusion
The Nutrient-Based Subsidy (NBS) represents a crucial reform in India’s fertiliser policy. It moves the focus from product-based to nutrient-based support, promoting both economic efficiency and environmental sustainability. By rationalising subsidies and encouraging balanced nutrient application, the NBS scheme strengthens the foundation of India’s agriculture — ensuring healthy soils, higher yields, and secure livelihoods for millions of farmers.
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The Source’s Authority and Ownership of the Article is Claimed By THE STUDY IAS BY MANIKANT SINGH
