Fertiliser Subsidy in India: Nutrient Imbalance and Soil Health

Fertilisers are essential agricultural inputs that enhance crop productivity and support India's food security. However, the fertiliser subsidy in India has contributed to the imbalanced application of nutrients, adversely affecting soil health and agricultural sustainability. The effectiveness of fertilisers depends on the balanced application of nitrogen (N), phosphorus (P) and potassium (K), along with secondary and micronutrients. Although India's fertiliser subsidy regime has made chemical fertilisers affordable, the differential pricing of urea and phosphatic and potassic fertilisers has encouraged nutrient imbalance.

I. How the Existing Fertiliser Subsidy Regime Contributes to Nutrient Imbalance

1. Differential Pricing of Fertilisers

• The Nutrient Based Subsidy (NBS) scheme, introduced in 2010, provides nutrient-linked subsidies for phosphatic and potassic (P&K) fertilisers, while urea remains outside the scheme and is sold at a government-controlled price.
• This differential treatment makes nitrogen comparatively cheaper than phosphorus and potassium, incentivising farmers to overuse urea while reducing their application of other essential nutrients.

2. Imbalanced Application of NPK Nutrients

• Currently, India's national nitrogen-phosphorus-potassium (N:P:K) application ratio stands at 10.5:4.1:1, compared with a recommended ratio of 2.8:1.5:1.
• Between the triennium ending (TE) 2009–10 and TE 2024–25, nitrogen use shifted from 7% below the recommended dose to 6% above it, while the potassium deficit deepened from 48% to 72%. This demonstrates that the subsidy regime has failed to achieve its intended objective of balanced nutrient application.

3. Distorted Agricultural Incentives

• Minimum Support Price (MSP) procurement and subsidised electricity encourage the continued cultivation of input-intensive crops such as paddy and wheat in certain regions.
• These incentives reinforce intensive cropping patterns and excessive fertiliser use, particularly in states such as Punjab and Haryana, where agricultural practices also exert pressure on groundwater resources.
• Consequently, fertiliser subsidies interact with other agricultural policies to perpetuate unsustainable production systems.

II. Consequences on Soil Health

1. Declining Soil Fertility

• Excessive application of nitrogen without adequate phosphorus, potassium and micronutrients disrupts the natural nutrient balance of soil.
• Continuous intensive cultivation, declining organic matter and inadequate replenishment of nutrients further degrade soil structure and fertility. Over time, this reduces the soil's capacity to sustain agricultural productivity.

2. Declining Nutrient-Use Efficiency

• When fertilisers are applied beyond crop requirements or without balanced nutrient management, plants cannot effectively absorb all the nutrients supplied.
• This wastes valuable agricultural inputs and increases the cost of cultivation without generating proportionate gains in crop yields.

3. Environmental Degradation

• Excess nitrogen can be lost through ammonia volatilisation, nitrate leaching and emissions of nitrous oxide, a potent greenhouse gas.
• Nitrate leaching contaminates groundwater and can pose health risks, including methaemoglobinaemia or blue baby syndrome in infants.
• Excessive fertiliser use can also contribute to soil acidification and eutrophication of water bodies.

4. Fiscal Burden and Import Vulnerability

• The fertiliser subsidy regime imposes a substantial fiscal burden on the government. The Union Budget 2026–27 allocated approximately ₹1.71 lakh crore for fertiliser subsidies.
• India's dependence on imported fertiliser inputs, particularly potash, also exposes domestic agriculture to international price fluctuations and geopolitical disruptions.

III. Way Forward

• The government should review the differential pricing of urea and P&K fertilisers to make balanced nutrient application economically attractive.
• The Soil Health Card Scheme should be integrated more effectively with agricultural extension services to help farmers apply fertilisers according to soil nutrient status and crop requirements.
• Chemical fertilisers should be used alongside farmyard manure, compost, green manure, biofertilisers and crop residues.
• Promoting leguminous crops. Leguminous crops, including pulses, can contribute to biological nitrogen fixation, while crop rotation and residue management help maintain soil organic matter and improve soil structure.
• The PM-PRANAM scheme incentivises States and Union Territories to reduce chemical fertiliser consumption by providing grants linked to the subsidy savings achieved. Its implementation shall be strengthened.
• Farmers shall apply the right source, right rate, right time and right place to maximise nutrient-use efficiency. Precision application, fertigation and drip irrigation can further reduce nutrient losses, particularly in water-stressed regions.

Conclusion

India's fertiliser subsidy regime has played an important role in ensuring food security, but its differential pricing structure has contributed to nutrient imbalance and environmental degradation. The way forward is not to eliminate fertiliser subsidies, but to redesign them to reward balanced nutrient use, improve soil health and protect farmers' incomes.