PM-PRANAM scheme gets CCEA approval to boost alternative fertilisers

Urea subsidy of Rs 3.68 trillion to continue till March 2025

Don't want to miss the best from Business Standard?

The Union Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved PM-PRANAM, which is aimed at incentivising states to use alternative, non-chemical fertilisers, and also decided to continue the current urea subsidy for three years starting FY23, with an outlay of Rs 3.68 trillion.

Fertiliser minister Mansukh Mandaviya said that the urea subsidy outlay projection was an estimation and not a cap, and the Centre would provide more money, if required.

The CCEA also took two more decisions for the fertiliser sector — a Rs 1,451 crore subsidy to promote organic manure, and a decision to debut sulphur-coated urea (Urea Gold) to address sulphur deficiency in the soil and reduce urea use.

The subsidy on organic manure will take the total cost of Wednesday’s package to over Rs 3.70 trillion.

PM-PRANAM stands for Prime Minister’s Programme for Restoration, Awareness, Generation, Nourishment and Amelioration of Mother Earth). In case of this scheme, fertiliser minister Mansukh Mandaviya said that if a state was using 1 million tonne of conventional fertiliser and it reduced its consumption by 0.3 million tonne, then the subsidy saving would amount to Rs 3,000 crore.

Of this saving, the Centre will give 50 per cent, or Rs 1,500 crore, to the state for promoting the use of alternative fertiliser and other development works.

PM-PRANAM was first announced in the 2023-24 Budget by the Union government.

On urea, continuation of the subsidy till 2025 will ensure constant availability of fertiliser to the farmers at the same price of Rs 242 per 45 kg bag, excluding taxes and neem-coating charges.

The total urea subsidy of Rs 3.68 trillion for three years does not include Rs 38,000 crore approved for phosphatic and potassic (P&K) fertilisers in kharif of 2023-24.

On sulphur-coated urea, Mandaviya said it was more economical and efficient than other kinds of urea.

For instance, nitrogen absorption in conventional urea is 30 per cent, in neem-coated urea is 50 per cent, and in nano urea is 80 per cent. Sulphur-coated urea will increase nitrogen absorption efficiency to 78 per cent.

It will also be eligible for subsidy like normal urea bags, and won’t be more priced higher.

On providing assistance to organic manure, the minister said Rs 1,451.84 crore had been approved for market development assistance (MDA) for promoting organic fertiliser from Gobardhan plants.

Under the scheme, a subsidy of Rs 1,500 per tonne will be provided to support the marketing of organic fertilisers — fermented organic manures (FOM)/ liquid FOM/ phosphate-rich organic manures (PROM) produced as by-products from biogas plants/ compressed biogas (CBG) plants set up under umbrella GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) initiative.