Scheme to reduce chemical fertiliser use remains a ‘non-starter’; no incentives released to states yet

NEW DELHI: The govt’s ambitious scheme aimed at reducing chemical fertiliser consumption, PM-PRANAM, has remained a ‘non-starter’ as the Centre has not been able to released a single Rupee as incentive to any state even after two-and-half years of its launch, as per a report of a parliamentary committee.

PM-PRANAM was approved in June 2023 for promotion of balanced and sustainable fertiliser use and reducing the subsidy outgo for chemical soil nutrients for three years from FY24 to FY26. The states were to be compensated or granted financial resources equivalent to 50% of the fertiliser subsidy saved in a particular financial year by reducing consumption of urea, DAP, NPK and potas compared to previous three years’ average consumption.

“With the scheme in its final year (2025-26), the window for meaningful impact is rapidly closing. The committee, therefore, strongly recommend that govt undertake an urgent review of PM-PRANAM scheme to simplify eligibility conditions, reduce bureaucratic hurdles in disbursement, and process and release the incentives due to eligible states/ UTs without further delay,” the standing committee on fertiliser said in its report submitted in Parliament last week.

The panel has taken note of the fertiliser department’s submission that only nine states and UTs were found eligible during 2023-24 with a total reduction of chemical fertiliser consumption of 1.5 million tonnes (MT), and in 2024-25, only three were eligible with a reduction of barely 42,000 tonne. The department informed the panel that the assessment of reduction in fertiliser consumption for the current financial year will be conducted after March 31.

The committee has recommended that beyond the current scheme period, a revamped and more effective successor scheme should be designed, in consultation with states, to “genuinely incentivise” a sustainable transition towards organic, nano, and bio-fertilisers and away from excess use of chemical soil nutrients. It said the govt should allocate an adequate budget to commensurate with the scale of the targeted transformation.

The fertiliser subsidy outgo for FY26 is projected at Rs 2.1 lakh crore.

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