Plans to reduce fertilizer use remain ‘non-starter’; incentives not yet distributed to states

New Delhi: The government’s ambitious scheme PM-PRANAM to reduce fertilizer consumption remains “unable to launch” as the Center has failed to release a single rupee as an incentive to any state even two-and-a-half years after its launch, according to a parliamentary committee report.PM-PRANAM was approved in June 2023 to promote balanced and sustainable fertilizer use and reduce subsidy expenditure on chemical soil nutrients over a three-year period from FY24 to FY2026. By reducing consumption of urea, DAP, NPK and potash fertilizers (compared to the average consumption of the previous three years), states will be compensated or receive financial resources equal to 50% of the fertilizer subsidy saved in a given financial year.“As the scheme enters its final year (2025-26), the window for meaningful impact is closing rapidly. The committee, therefore, strongly recommends that the government conduct an urgent review of the PM-PRANAM scheme to simplify eligibility conditions, reduce bureaucratic hurdles in disbursement and for immediate processing and disbursement of incentives to eligible states/Union Territories,” the Standing Committee on Fertilizers said in its report tabled in Parliament last week.The panel took note of the fertilizer department’s submission that during 2023-24, only 9 states and union territories were eligible and total fertilizer consumption decreased by 1.5 million tonnes (MT), while in 2024-25, only 3 states and union territories were eligible and the reduction was only 42,000 MT. The department informed the panel that the assessment of reduction in fertilizer consumption during the current financial year will be carried out after March 31.The committee recommended that after the current program period, a revised and more effective follow-up program should be designed in consultation with the states to “genuinely incentivize” a sustainable transition to organic, nano and biofertilizers and avoid the overuse of chemical soil nutrients. It said governments should allocate sufficient budgets commensurate with the scale of targeted transformation.Fertilizer subsidy expenditure in FY26 is expected to be Rs 210 crore.