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PM PRANAM: Relevance for UPSC Exam

General Studies III- Issues Related to Farm Subsidies & MSP.



In order to reduce the use of chemical fertilizers by incentivizing states, the Union government plans to introduce a new scheme – PM PRANAM, which stands for PM Promotion of Alternate Nutrients for Agriculture Management Yojana.

What is the PM PRANAM scheme?

  • The proposed scheme intends to reduce the subsidy burden on chemical fertilizers.
  • This burden if uneased, is expected to increase to Rs 2.25 lakh crore in 2022-2023, which is 39% higher than the previous year’s figure of Rs 1.62 lakh crore.
  • The scheme will not have a separate budget and will be financed by the “savings of existing fertilizer subsidy” under schemes run by the Department of fertilisers.

PM PRANAM: Subsidies

Further, 50% subsidy savings will be passed on as a grant to the state that saves the money and that 70% of the grant provided under the scheme can be used for asset creation related to technological adoption of alternate fertilizers.

  • It would create alternate fertilizer production units at village, block and district levels.
  • The remaining 30% grant money can be used for incentivizing farmers, panchayats, farmer producer organizations and self-help groups that are involved in the reduction of fertilizer use and awareness generation.
  • The government will compare a state’s increase or reduction in urea in a year, to its average consumption of urea during the last three years.

India’s fertilizer requirement

  • The kharif season (June-October) is critical for India’s food security, accounting for nearly half the year’s production of foodgrains, one-third of pulses and approximately two-thirds of oilseeds.
  • A sizable amount of fertilizer is required for this season.
  • The Department of Agriculture and Farmers Welfare assesses the requirement of fertilizers each year before the start of the cropping season, and informs the Ministry of Chemical and fertilizers to ensure the supply.
  • The amount of fertilizer required varies each month according to demand, which is based on the time of crop sowing, which also varies from region to region. For example, the demand for urea peaks during June-August period, but is relatively low in March and April, and the government uses these two months to prepare for an adequate amount of fertilizer for the kharif season.


  • Due to increased demand for fertilizer in the country over the past 5 years, the overall expenditure by the government on subsidy has also increased.
  • The final figure of fertilizer subsidy touched Rs 1.62 lakh crore in 2021-22.
  • The total requirement of four fertilizers — Urea, DAP (Di-ammonium Phosphate), MOP (Muriate of potash), NPKS (Nitrogen, Phosphorus and Potassium) — increased by 21% between 2017-2018 and 2021-2022, from 528.86 lakh metric tonnes (LMT) to 640.27 LMT.
  • PM PRANAM, which seeks to reduce the use of chemical fertilizer, will likely reduce the burden on the exchequer.
  • The proposed scheme is also in line with the government’s focus on promoting the balanced use of fertilizers or alternative fertilizers in the last few years.


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