The Nutrient Based Subsidy (NBS) is a Central Sector scheme of the Government of India, administered by the Department of Fertilizers under the Ministry of Chemicals & Fertilizers. The scheme was introduced, effective from April 1, 2010, to address the problem of imbalanced fertilizer use that arose after the deregulation of Phosphatic and Potassic (P&K) fertilizers in 1992. This deregulation caused P&K prices to surge, leading farmers to overuse subsidized Nitrogen (N) fertilizer (Urea), which resulted in soil nutrient imbalance and reduced soil productivity.
The NBS scheme works by fixing a per-kilogram subsidy rate for four key nutrients: Nitrogen (N), Phosphorus (P), Potash (K), and Sulphur (S). The total subsidy for a specific fertilizer grade, such as DAP (Di-ammonium Phosphate) or MOP (Muriate of Potash), is calculated based on the actual content of these nutrients in the product. This mechanism incentivizes the balanced application of nutrients and encourages the use of fertilizers fortified with secondary and micronutrients like Boron and Zinc, which receive an additional subsidy. The subsidy is paid to fertilizer manufacturers and importers, who are then allowed to set the Maximum Retail Price (MRP) of the P&K fertilizers at a reasonable level, making them available to farmers at subsidized rates.
The scheme covers non-urea fertilizers, including 28 grades of P&K fertilizers as of Kharif 2024, up from 25 grades until Rabi 2023–24. A critical connection is that Urea remains outside the NBS framework and is still governed by a separate price-controlled subsidy system, which continues to be a point of debate regarding its impact on balanced fertilization. The subsidy rates are recommended by an Inter-Ministerial Committee (IMC) and are revised periodically, often annually or biannually, to align with global price trends of fertilizers and raw materials. The government recently approved the NBS rates for Rabi 2025–26, effective from October 1, 2025, to March 31, 2026.