What is PM PRANAM scheme that aims to reduce use of chemical fertilisers?

With the aim to reduce the use of chemical fertilisers in agriculture, the Centre plans to launch a scheme called the PM Promotion of Alternate Nutrients for Agriculture Management Yojana or PM PRANAM, which will incentivise the states.

The proposed scheme will help the government reduce its subsidy burden on chemical fertilisers, which is expected to rise 39 percent to Rs 2.25 lakh crore in 2022-23 from Rs 1.62 lakh crore last year.

What is the PM PRANAM scheme?

There has been a sharp increase in overall fertiliser use in the last five years. The government is planning to launch the PM PRANAM scheme that will pass on 50 percent of subsidy savings as a grant to the state that saves the money. Of this, the state needs to use 70 percent on creating assets that would lead to technological adoption in alternate fertilisers and alternate fertiliser production units at district levels, blocks and villages.

The states can use the remaining 30 percent to reward and encourage farmers, panchayats, farmer producer organisations and self-help groups involved in generating awareness and helping in reducing the use of fertiliser.

The government will compare the state’s increase or decrease in the use of chemical fertiliser in a year to its average consumption in the last three years. The government will use the fertiliser ministry dashboard iFMS to compare the data.

There will be no separate budget for the PM PRANAM scheme. It will be financed through the “savings of existing fertiliser subsidy” provided by the department of fertilisers under various schemes.

Why is it necessary?

In the past five years, the requirement for four fertilisers — Urea, MOP (Muriate of potash), DAP (Di-ammonium Phosphate) and NPK (Nitrogen, Phosphorus and Potassium) — rose 21 percent from 528.86 lakh metric tonnes in 2017-18 to 640.27 lakh metric tonnes (LMT) in 2021-22, Bhagwanth Khuba, Minister of State for Chemicals and Fertilisers, informed the Lok Sabha on August 5.

DAP had recorded a maximum increase of 25.44 percent from 98.77 LMT in 2017-18 to 123.9 LMT in 2021-22. The most-used chemical fertiliser in India is urea, which recorded an increase of 19.64 percent from 298 LMT in 2017-18 to 356.53 in 2021-22.

In order to promote the balanced use of fertilisers or alternative fertilisers, the government plans to introduce the PM PRANAM scheme. The government provides subsidies to cushion farmers from high prices that rose due to the spike in global prices of fertilisers. In May, the finance ministry announced an additional fertiliser subsidy of Rs 1.10 lakh crore this year.

According to official records, the government has allocated Rs 79,530 crore as fertiliser subsidy in the Union Budget 2021-22, which increased to Rs 1.40 lakh crore in the revised estimates (RE). The final figure touched Rs 1.62 lakh crore in 2021-22.

In 2022-23, the government has budgeted Rs 1.05 lakh crore. However, the fertilizer minister has said that the subsidy figure could cross Rs 2.25 lakh crore during the year.