🌾 Schemes & WelfareMAINS · GS3.5 · GS3.14

PM-PRANAM rewards states for cutting chemical fertiliser

A grant scheme that pays States out of the subsidy they save by using less chemical fertiliser — now paired with a nationwide nano-fertiliser push.

What happened

The Department of Fertilizers told the Lok Sabha that the Government continues to run PM-PRANAM — the PM Programme for Restoration, Awareness Generation, Nourishment and Amelioration of Mother-Earth — approved on 28 June 2023.
The scheme's promise is a grant to any State or UT that cuts its chemical-fertiliser consumption in a financial year below its own previous three-year average.
The reward is 50% of the fertiliser subsidy saved by that reduction, returned to the State as a grant rather than as a fresh central allocation.
Alongside, the Department has launched a Maha Abhiyan with fertiliser companies to push Nano DAP and Nano Urea Plus across all 15 agro-climatic zones.
IFFCO has run more than 5,800 farmer field trials of nano fertilisers over 2024–25 and 2025–26 under ICAR guidance and ICAR–Krishi Vigyan Kendra (KVK) supervision.
The reply also tabled long-term ICAR experiment data showing that balanced and integrated nutrient use lifts yields by up to 50% and improves soil health, while nitrogen-only use degrades both.

Background & context

India runs one of the world's largest fertiliser-subsidy regimes. The Centre keeps farm-gate prices of urea fixed by statute and pays manufacturers the gap, while phosphatic and potassic fertilisers (DAP, NPK complexes, MOP) are subsidised under the Nutrient Based Subsidy (NBS) scheme. The combined bill routinely runs into lakhs of crore of rupees a year, and almost all of it flows for chemical fertilisers — overwhelmingly urea. That single fact created two linked problems the Government has long acknowledged: a fiscal problem (a subsidy bill that balloons with global gas and rock-phosphate prices, most of it imported) and an agronomic one (decades of cheap urea have skewed the soil's nitrogen-phosphorus-potassium ratio, depleting organic carbon and micronutrients).

PM-PRANAM is the Centre's answer to both at once, and its design is unusual. It was approved by the Union Cabinet on 28 June 2023 and is administered by the Department of Fertilizers under the Ministry of Chemicals & Fertilizers — not by the agriculture ministry, even though its subject is soil and farming. The reason is structural: the money it disburses is the fertiliser subsidy, which the Department of Fertilizers controls. PM-PRANAM therefore tries to turn a runaway subsidy into a lever: if a State can be paid a share of the subsidy it helps the Centre avoid, the State gains a direct financial stake in weaning its farmers off chemical fertilisers. It sits within a wider family of soil-and-natural-farming pushes the Government has built over the past few years — the National Mission on Natural Farming, the Soil Health Card programme, and the promotion of organic and bio-fertilisers — but PM-PRANAM is the one that ties State behaviour to a cash reward.

For Prelims

Full form: PM Programme for Restoration, Awareness Generation, Nourishment and Amelioration of Mother-Earth (PM-PRANAM).
Approved: 28 June 2023 · Nodal: Department of Fertilizers, Ministry of Chemicals & Fertilizers · Coverage: all States and UTs.
The incentive trigger: a State must reduce consumption of chemical fertilisers — Urea, DAP, NPK, MOP — in a financial year against its average of the previous three years.
The reward: a grant equal to 50% of the fertiliser subsidy saved by that reduction.
Grant split: 95% goes to the State; of that, 65% is for capital-expenditure projects (preferably as contributions to Centrally Sponsored Schemes) and 30% is untied, usable for Information, Education and Communication (IEC) activities.
No new budget: PM-PRANAM has no separate fund or fresh budget head — it is financed entirely out of savings in existing fertiliser-subsidy schemes (urea subsidy and NBS).
The nano push: a Maha Abhiyan promotes Nano DAP and Nano Urea Plus through field demonstrations across all 15 agro-climatic zones; the Nano Urea Plus campaign covers 100 districts.
Field-trial scale: IFFCO conducted 2,500 (2024–25) + 2,938 (2025–26) Nano DAP trials and 448 + 484 Nano Urea trials — together over 5,800 trials — under ICAR and KVK supervision.
ICAR long-term findings: 100% NPK lifts yields about 20–30% over nitrogen-only use; 100% NPK plus farmyard manure (integrated nutrient management) raises it a further 30–50% over control; integrated use also raises soil organic carbon by ~0.1–0.3 percentage points and microbial biomass carbon by 20–40%.
Soil Health Card link: farmers buy subsidised fertiliser on the SHC recommendation, available at any retail shop or a Pradhan Mantri Kisan Samridhi Kendra (PMKSK); but the Soil Health Card is run by the Department of Agriculture & Farmers' Welfare, a different ministry.
What it is NOT: PM-PRANAM is not a subsidy to farmers and not a price scheme — it is a grant to State governments. It does not ban or cap chemical fertilisers; it rewards a voluntary, measurable reduction. It carries no fresh outlay of its own — confusing it with a new spending line is the classic trap. And it is not run by the agriculture ministry but by the Department of Fertilizers.

For the "how many / match the pairs" patterns, fix the soil-and-fertiliser family that PM-PRANAM belongs to and keep the administering ministry of each straight: PM-PRANAM and the Nano fertiliser / Maha Abhiyan push sit under the Department of Fertilizers (Chemicals & Fertilizers); the Soil Health Card scheme, the National Mission on Natural Farming, the Paramparagat Krishi Vikas Yojana (organic farming) and per-drop-more-crop irrigation sit under the Department of Agriculture & Farmers' Welfare. The two umbrella subsidy schemes PM-PRANAM draws its savings from are the urea subsidy (urea price fixed by the Centre) and the Nutrient Based Subsidy (NBS) regime (for P and K fertilisers). On the products: Nano Urea and Nano DAP are liquid nano-formulations developed and marketed by IFFCO, designed to substitute for part of conventional granular urea and DAP and reduce volumes applied.

Why it matters

The problem PM-PRANAM addresses is real and well-documented. India's fertiliser use is heavily unbalanced toward nitrogen because urea is the cheapest and most heavily subsidised input; the recommended N:P:K ratio is routinely violated in major foodgrain belts. The ICAR data the Department tabled spells out the consequence: continuous nitrogen-only application leads to declining yields and deteriorating soil properties over time, whereas balanced NPK plus organic matter raises both yield and the soil's organic carbon and microbial life. So the agronomic case for cutting indiscriminate chemical use is not speculative — it is backed by long-term coordinated experiments, some running since 1978 and 1986 at the University of Agricultural Sciences, GKVK, Bangalore.

The fiscal case is equally direct. By paying States half of any subsidy they help avoid, the Centre converts a deadweight cost into a shared saving and creates an incentive that did not previously exist — States had no reason to discourage fertiliser use because the subsidy bill is borne by the Centre. The design also nudges the saved money toward durable assets: 65% of a State's grant must go to capital expenditure, preferably topping up Centrally Sponsored Schemes, so the reward funds soil-restoration and alternative-fertiliser infrastructure rather than recurring giveaways. The nano-fertiliser leg supplies the practical substitute: if a farmer can replace a 45-kg urea bag or a DAP bag with a small bottle of nano formulation, the State's measurable chemical-fertiliser tonnage falls, which is exactly the metric PM-PRANAM rewards. The catch the scheme must overcome is measurement and behaviour — a reduction must be genuine and not merely a year of low rainfall or supply disruption, and farmers must trust that nano substitutes protect yield. That is precisely why the 5,800-plus field trials and the ICAR-supervised demonstrations matter: they are the evidence base meant to make the reduction durable rather than a one-year statistical dip.

For Mains

Anchor

PM-PRANAM can anchor an answer on reforming India's fertiliser-subsidy regime: a scheme that needs no fresh outlay because it pays States out of the subsidy they help the Centre save, aligning fiscal and ecological incentives.

Exemplify

Use it as a concrete example of incentive-compatible federal design — making a State a financial stakeholder in a behaviour (cutting chemical-fertiliser use) whose cost it does not otherwise bear.

Data

Cite the ICAR long-term findings — balanced NPK lifting yields 20–30%, integrated nutrient management a further 30–50%, with measurable gains in soil organic carbon and microbial biomass — as evidence for sustainable nutrient management.

Problematise

Flag the open questions the design admits: how a "genuine" reduction is verified against weather and supply noise, the still-skewed N:P:K ratio, and the split administration between two ministries (fertiliser subsidy vs Soil Health Card) that complicates integration.

Way fwd

Point to nano fertilisers, Soil Health Card-based balanced application and integrated nutrient management as the practical substitutes that make a chemical-fertiliser reduction durable rather than a one-year dip.

Deploys into: subsidies and their reform (GS3.5: MSP/subsidies/food security); conservation and sustainable agriculture (GS3.14: pollution/soil degradation); and cooperative-federalism / incentive-based governance design (GS2.10 govt interventions).

For UPSC: PM-PRANAM (2023) gives no fresh budget head — it funds States from the subsidy saved by cutting chemical-fertiliser use, paying a grant equal to 50% of that saving; 95% goes to the State (65% capex, 30% untied). Nodal: Department of Fertilizers — not the agriculture ministry.

Ministry of Chemicals and Fertilizers · 2026-03-27 · PRID 2246007 · PIB source ↗