The Nutrient Based Subsidy (NBS) Scheme is a Central Sector scheme administered by the Department of Fertilizers under the Ministry of Chemicals and Fertilizers. It was introduced on April 1, 2010, to replace the earlier product-based subsidy system for non-urea fertilizers. The scheme was created to address the problem of imbalanced fertilizer use, which arose because the price of Nitrogen (N)-based urea was still controlled, leading to its overuse compared to the deregulated Phosphatic (P) and Potassic (K) fertilizers. The primary goal is to promote the balanced application of nutrients to the soil, thereby improving agricultural productivity and ensuring food security.
The scheme works by providing a fixed amount of subsidy, decided on an annual or bi-annual basis, per kilogram of nutrient content for Phosphatic and Potassic (P&K) fertilizers. The subsidy is calculated based on the content of four key nutrients: Nitrogen (N), Phosphorus (P), Potash (K), and Sulphur (S). This subsidy is paid directly to the fertilizer manufacturers and importers. A key provision is the decontrol of the P&K sector, which allows companies to set the Maximum Retail Price (MRP) of these fertilizers at reasonable levels, which the government monitors. The scheme covers 28 grades of P&K fertilizers, including Di-Ammonium Phosphate (DAP).
The NBS scheme is closely connected to the issue of urea subsidy, as urea is the only fertilizer that remains outside the NBS framework, with its MRP statutorily fixed at ₹242 per 45-kg bag since March 2018. This exclusion is often cited as a reason for the continued nutrient imbalance in the soil. Recently, the scheme has been amended to include three additional fertilizer grades from Kharif 2024 onward, increasing the total number of subsidized P&K grades from 25 to 28. Furthermore, the government provides an extra subsidy for fertilizers fortified with secondary and micronutrients like Boron and Zinc, as specified in the Fertilizer Control Order, to encourage their use. The subsidy is transferred to fertilizer companies through the Direct Benefit Transfer (DBT) system, and the entire process is monitored using the Integrated Fertilizer Management System (iFMS).