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In a green agri push, cabinet nod likely for PM-Pranam, 2 schemes
India's Ministry of Chemicals and Fertilizers is set to propose a cash incentive scheme called PM-Pranam, which rewards states for reducing their consumption of chemical soil nutrients. The move is part of a wider policy designed to limit fertilizer subsidies and promote natural and organic farming. The scheme is expected to save the government INR190bn ($2.5bn) in subsidies and will be calculated at 50% of fertilizer subsidy savings by way of reduced consumption for a given year based on a baseline average consumption of the past three years.
The Mansukh Mandaviya-headed ministry of chemicals and fertilizers will soon present before the cabinet a plan to roll out PM-Pranam, a scheme to hand out cash incentives to states that can cut their consumption of chemical soil nutrients, said a person aware of the development.
The programme, announced by finance minister Nirmala Sitharaman in her 2023-24 budget speech in February, is part of a broader policy push to limit fertilizer subsidies, and promote natural and organic farming, which will save the government an estimated ₹19,000 crore in subsidies. “It is also about making agriculture more sustainable,” the official said, declining to be named.
Apart from PM-Pranam, a scheme named liberalised market development assistance and another one to introduce sulphur-coated urea is likely to come up before the cabinet following their finalisation. The government was in the process of finalising the PM-Pranam scheme’s operational guidelines, HT reported on April 3.
Food and fertiliser subsidies accounted for about an eighth of India’s budget worth nearly ₹39 lakh crore (2022-23). India, the world’s third-largest fertilizer buyer, relies on imports to meet domestic demand.
The country’s food security is closely linked to availability of fertilisers, whose prices hit a multi-year peak in 2022 due to the Ukraine conflict and knock-on effects of the pandemic on supply chains. The government’s spending on crop-nutrient subsidies for 2022-23 leapt to a record ₹2.25 lakh crore.
Fertilisers are sold by manufacturers at a discount to millions of farmers, who are then reimbursed by the Centre. For the current fiscal year, the budgeted fertilizer subsidy is ₹1.75 lakh crore.
Under PM-Pranam, 50% of fertilizer subsidies saved by a state will be given back to it as a grant, which states can put to any use, such as building infrastructure, according to a draft scheme, the person cited above said. “In other words, if a state saves ₹3,000 crore, then it will get back ₹1,500 crore,” the person said.
The incentive will be calculated at 50% of fertilizer subsidy savings by way of reduced consumption for a given year based on a baseline average consumption of the past three years, according to the methodology fixed.
The market development assistance scheme, which promotes urban composting, will broaden its scope to cover organic waste and include rural areas. Composting is the process of decaying plant material so it can be added to soil as manure.
The sulphur-coated urea scheme, being called Urea Gold, is also likely to be approved by the cabinet. Liquid nano urea and sulphur-coated urea have higher efficiency and are cheaper than conventional urea.
“PM Program for Restoration, Awareness, Nourishment and Amelioration of Mother Earth (PM-Pranam) will be launched to incentivise states and Union territories to promote alternative fertilisers and balanced use of chemical fertilisers,” finance minister Nirmala Sitharaman had said in her budget speech on February 1.
