GS Paper - 3 (Economy)

In order to reduce the use of chemical fertilisers by incentivising states, the Union government plans to introduce a new scheme – PM PRANAM, which stands for PM Promotion of Alternate Nutrients for Agriculture Management Yojana. The proposed scheme intends to reduce the subsidy burden on chemical fertilisers.

What is the PM PRANAM scheme?

  1. The scheme will not have a separate budget and will be financed by the “savings of existing fertiliser subsidy” under schemes run by the Department of fertilisers.
  2. Further, 50% subsidy savings will be passed on as a grant to the state that saves the money and that 70% of the grant provided under the scheme can be used for asset creation related to technological adoption of alternate fertilisers and alternate fertiliser production units at village, block and district levels.
  3. The remaining 30% grant money can be used for incentivising farmers, panchayats, farmer producer organisations and self-help groups that are involved in the reduction of fertiliser use and awareness generation.
  4. The government will compare a state’s increase or reduction in urea in a year, to its average consumption of urea during the last three years.
  5. Data available on a fertiliser Ministry dashboard, iFMS (Integrated fertilisers Management System), will be used for this purpose.

Why is the scheme being introduced?

  1. Due to increased demand for fertiliser in the country over the past 5 years, the overall expenditure by the government on subsidy has also increased.
  2. The total requirement of four fertilisersUrea, DAP (Di-ammonium Phosphate), MOP (Muriate of potash), NPKS (Nitrogen, Phosphorus and Potassium) — increased by 21% between 2017-2018 and 2021-2022.
  3. PM PRANAM, which seeks to reduce the use of chemical fertiliser, will likely reduce the burden on the exchequer.
  4. The proposed scheme is also in line with the government’s focus on promoting the balanced use of fertilisers or alternative fertilisers in the last few years.