PM-PRANAM Scheme: Is it Panecia for Fertilizer Subsidy?

(Relevant for General Studies Paper Prelims/Mains)

PM PRANAM Scheme: Is it Panacea for Fertilizer Subsidy?

The Union Budget 2023–24 introduced PM-PRANAM, aimed at encouraging the judicious utilization of both chemical and alternative fertilizers while also raising awareness about regenerative agriculture (RA).

RA represents an outcome-oriented approach to food production. It prioritizes the rejuvenation of soil health, preservation of climate, water resources, and biodiversity, and the augmentation of farms’ productivity and economic viability.

PM PRANAM Scheme

• It is abbreviated as PM Programme for the Revival, Enlightenment, Enhancement, and Enhancement of Mother Earth.
• Its primary objective is to decrease the reliance on chemical fertilizers and encourage the well-balanced application of alternative fertilizers.
• This initiative will alleviate the financial burden of subsidies on chemical fertilizers, which is expected to reach Rs 2.25 lakh crore in the fiscal year 2022-2023.
• Furthermore, it will bolster the resilience of Indian agriculture in response to the evolving climate. States that maintain a lower consumption of chemical fertilizers compared to their three-year average will receive incentives.
• These states will receive a 50% grant based on the savings in subsidies, which they can allocate for asset creation, technological integration, and initiatives aimed at raising awareness about alternative fertilizers.
• Active involvement in the reduction of fertilizer usage will be encouraged among farmers, panchayats, farmer producer organizations, and self-help groups.
• This initiative aligns with the government’s emphasis on promoting sustainable and environmentally conscious agricultural practices.
• It will complement existing programs such as the National Mission for Sustainable Agriculture (NMSA), National Initiative on Climate Resilient Agriculture (NICRA), and PM Krishi Sinchaayi Yojna .

Issues with Fertilizer Usage in India

• Imbalance in Fertilizer Utilization: India’s recommended fertilizer ratio stands at 4:2:1 for nitrogen (N), phosphorus (P), and potassium (K), but the actual ratio significantly deviates from this, with excessive nitrogen and insufficient phosphorus and potassium. This imbalance results in nutrient deficiencies, soil degradation, and diminished crop yields.
• As per a NITI Aayog report, India’s average NPK ratio in 2015-16 was 8:3:1, a considerable departure from the suggested 4:2:1 ratio.
• Overuse of Nitrogen-Based Fertilizers: India ranks as the third-largest producer and second-largest consumer of urea, a nitrogen-based fertilizer. Nonetheless, the excessive application of urea negatively impacts soil health, water quality, and greenhouse gas emissions. Urea subsidies also distort the fertilizer market by indirectly supporting the production of other fertilizers.
• Limited Domestic Production and Import Dependence: India’s domestic reserves of P and K fertilizers are restricted, leading to a heavy reliance on imports from foreign nations. This reliance makes India susceptible to global price fluctuations and availability variations. Furthermore, India has made minimal investments in expanding its domestic fertilizer production capacity since the 1990s.
• According to the Department of Fertilizers’ annual report, India possesses a domestic production capacity of 24.66 million metric tons of P&K fertilizers, fulfilling only 50% of the domestic demand. The remaining demand is met through imports from countries like China, Russia, Morocco, Jordan, and Saudi Arabia.
• Inefficient Distribution and Subsidy Mechanism: India employs a complex and costly system to subsidize fertilizers for farmers, involving multiple agencies, intermediaries, and significant leakages. This subsidy system fails to adequately incentivize efficient fertilizer usage or the adoption of organic or bio-fertilizers.
• The fertilizer subsidy has consistently represented a substantial portion of the Union Budget’s expenditures. In the 2023-24 Budget, the government has allocated Rs 1.75 trillion for fertilizer subsidies, marking the fourth consecutive year of exceeding one trillion rupees.
• India’s reliance on Liquified Natural Gas (LNG) for fertilizer production exposes it to elevated and unpredictable global gas prices, resulting in a soaring fertilizer subsidy bill. In FY 2020-21, LNG use in the fertilizer sector accounted for as much as 63% of total gas consumption.

Effects of Improper Utilization of Fertilizers

• Environmental Pollution: Overutilization of fertilizers leads to environmental pollution as their residues and unused portions transform into pollutants, affecting the air, water, and soil.
• Eutrophication: The excessive application of fertilizers can induce eutrophication in water bodies, marked by the overgrowth of algae and other aquatic plants. This overgrowth diminishes oxygen levels and harms aquatic ecosystems.
• Soil Degradation: The continuous use of nitrogen-based fertilizers alone can degrade soil fertility and create deficiencies in vital macro and micronutrients. Additionally, it can disrupt soil microflora and fauna, essential for maintaining soil health.
• Diminished Crop Quality: Inappropriate fertilizer usage can stimulate excessive growth in certain plant components, such as leaves and stems, at the expense of reproductive structures like fruits and grains. Consequently, this leads to reduced crop quality and yield.
• Groundwater Contamination: Nitrate leaching from excessive fertilizer application can contaminate groundwater, posing health hazards to individuals who rely on such sources for drinking water. Elevated nitrate levels can result in methemo globinemia, also known as “blue baby syndrome.”
• Health Risks: The use of pesticides and herbicides in conjunction with fertilizers can pose health risks to both farmers and consumers when employed incorrectly or excessively.
• Economic Strain: Overuse of fertilizers can be economically burdensome for farmers, especially small and marginal ones, as it escalates input costs without corresponding increases in crop yields. This situation often leads to indebtedness.
• Greenhouse Gas Emissions: The production and application of synthetic fertilizers contribute to greenhouse gas emissions, notably nitrous oxide (N2O), a potent greenhouse gas implicated in climate change.
• Nutrient Uptake Imbalance: Inappropriate fertilizer application can create nutrient imbalances in the soil, affecting nutrient absorption by crops and necessitating corrective measures in subsequent growing seasons.

How can the PM PRANAM Scheme help reforming the Fertilizer Regime?

• Reduction in Subsidy Expenditure: PM Pranam has the potential to curtail the government’s subsidy expenditure by endorsing alternative or bio-fertilizers. The government’s ambition to establish 10,000 Bio-Input Resource Centres, creating a nationwide network for micro-fertilizer and pesticide production, underscores its commitment to this approach. Through the promotion and adoption of these bio-fertilizers, PM Pranam can gradually alleviate the fiscal burden associated with chemical fertilizer subsidies.
• Control of Fiscal Deficit: The reduction in subsidy costs facilitated by PM Pranam can contribute significantly to controlling India’s fiscal deficit. Fiscal deficits pose considerable economic challenges, and one effective way to address this issue is by diminishing subsidies.
• Phased Transition Away from Chemical Fertilizer Subsidies: PM Pranam has the potential to expedite the gradual reduction of chemical fertilizer subsidies. By offering support and incentives for the adoption of alternative fertilizers, the government can systematically reduce its financial commitment to chemical fertilizer subsidies.
• Empowerment of Farmer Fertilizer Cooperatives: PM Pranam can empower farmer fertilizer cooperatives to expand their biofertilizer production. Such support can lead to increased economies of scale and the establishment of a more extensive distribution network for alternative fertilizers.
• Stimulating Sales and Distribution Networks: It is essential to devise pricing and margin strategies for biofertilizers that motivate sales and distribution networks. PM Pranam can facilitate this process by providing incentives to cooperatives and businesses engaged in biofertilizer production and distribution.
• Demonstration and Certification: PM Pranam can endorse initiatives that showcase the effectiveness of alternative fertilizers in real farming scenarios. This is critical for building trust and encouraging farmers to embrace these products. The certification of these bio-fertilizers can also ensure quality and enable farmers or their associations to command better prices for their agricultural produce.

Hence, PRANAM scheme provides a hope for solving problem associated with fertilizer subsidies.

Sample Question for UPSC Sociology Optional Paper:

1. Question 1: What is the primary objective of the PM-PRANAM Scheme?
   Answer:
   The primary objective of PM-PRANAM is to decrease reliance on chemical fertilizers and encourage the balanced use of alternative fertilizers, thereby alleviating the financial burden of subsidies on chemical fertilizers.

   Question 2: How does PM-PRANAM aim to impact fiscal expenditures related to fertilizer subsidies?
   Answer:
   PM-PRANAM aims to reduce government expenditure on chemical fertilizer subsidies by promoting the use of alternative or bio-fertilizers, thereby helping to control the fiscal deficit.

   Question 3: What challenges are associated with fertilizer usage in India?
   Answer:
   The challenges include imbalanced nutrient application, environmental pollution, overreliance on imports, inefficient subsidy mechanisms, and economic and health risks.

   Question 4: How can PM-PRANAM contribute to sustainable agricultural practices?
   Answer:
   By promoting balanced fertilizer usage and the adoption of regenerative agriculture techniques, PM-PRANAM aligns with the government’s emphasis on environmentally conscious farming.

   Question 5: What is the significance of states maintaining a lower consumption of chemical fertilizers in the PM-PRANAM Scheme?
   Answer:
   States with lower chemical fertilizer consumption compared to their three-year average will receive incentives, such as a 50% grant based on the savings in subsidies, which they can allocate for asset creation and raising awareness about alternative fertilizers.

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