Can the PM PRANAM scheme revolutionize India's agricultural sector

India's agricultural reforms, particularly since 1991, have primarily aimed at doubling food output and empowering farmers. However, the government has now shifted its focus towards addressing the growing burden of fertilizer subsidy and soil health. The excessive use of chemical fertilizers has resulted in a decline in crop-yield response and an imbalance in nutrient application. Additionally, the government's subsidy burden on chemical fertilizers has witnessed a significant increase, estimated at Rs 2.25 lakh crore in FY23, up by 39% from the previous year's Rs 1.62 lakh crore. To tackle these challenges, the government has introduced a new scheme focused on optimizing fertilizer subsidies and promoting soil health.

The scheme intends to utilize the savings from subsidies to incentivize states to adopt alternative soil nutrients and monitor the use of fertilizers. It does not have a separate budget allocation but will be financed through the savings generated from existing fertilizer subsidies. Half of the saved subsidy amount will be granted to the state that achieves the savings, with 70% of the grant allowed to be utilized for creating assets and adopting technology related to alternative fertilizer production at the block, village, and district levels. The remaining grant can be used by states to incentivize panchayats (local self-government institutions), farmer producer organizations, farmers, and self-help groups involved in awareness generation and reducing fertilizer use. The utilization of fertilizers will be evaluated based on the increase or decrease in overall consumption compared to the past three years, and the Integrated Fertilizers Management System (iFMS) will be employed to track fertilizer usage.

The PM PRANAM scheme is expected to have multiple benefits. It will accelerate policies that enhance agricultural production while safeguarding the environment and human health. The scheme specifically aims to reduce the use of chemical fertilizers, particularly urea, due to the adverse health effects associated with excessive exposure. Chemical fertilizers also contribute to water pollution, causing algal blooms and negatively impacting aquatic life. By promoting the use of alternative nutrients and fertilizers, including natural options, the scheme aims to improve long-term soil quality, increase crop yields, and prevent environmental damage. In the period from April to mid-December 2022, India's fertilizer consumption reached around 40 million metric tonnes, with domestic production at 32 million metric tonnes and imports at 12.8 million metric tonnes.

The introduction of the PM PRANAM scheme aligns with the government's objective to reduce the escalating fertilizer subsidy bill while addressing soil degradation. In FY23, the government initially allocated Rs 1.05 lakh crore for fertilizer subsidies, which was later revised to Rs 2.25 lakh crore. For the current year, the allocation stands at Rs 1.75 lakh crore. Although subsidies benefit both fertilizer-producing companies and farmers by lowering prices, they have inadvertently contributed to the indiscriminate use of chemical nutrients in agriculture. This has resulted in inefficient utilization of nitrogen, the main component of urea, which is crucial for soil health. The ideal nitrogen-phosphorus-potassium ratio for India is 4:2:1, yet it was imbalanced at 12.8:5.1:1 during the 2022 kharif season. Furthermore, the crop-yield response to fertilizer use has diminished as urea sales surpassed 35.7 million tonnes in FY23.

In addition to the PM PRANAM scheme, the government has implemented other initiatives to protect soil health. This includes the incorporation of new nutrients such as nano urea and bio-stimulants. Moreover, the Department of Fertilizers has mandated all domestic companies to produce 100% neem-coated urea. Neem-coated urea offers various benefits, including improved soil health, reduced usage of plant protection chemicals, higher yields for crops like paddy, sugarcane, maize, soybean, and tur/red gram, as well as a decrease in pest and disease attacks.

By implementing the PM PRANAM scheme and other soil-saving measures, the Indian government aims to strike a balance between agricultural productivity and environmental sustainability. Through the promotion of alternative nutrients and the optimization of fertilizer subsidies, India can move towards a more efficient and sustainable agricultural sector, benefiting both farmers and the ecosystem.