Answer: The Centre has decreased Fertiliser subsidies by 6% in Budget 2024-25 and further aims to rationalize Fertilizer sector by launching One Nation One Fertilizer (ONOF) under the fertilizer subsidy scheme named “PM- Bhartiya Jan Urvarak Pariyojna” (PMBJP).

Issues with India's Fertiliser sector: 

• Import dependent: India imports 30% of its Urea requirements annually and China has emerged as the 2nd largest supplier in 2022-23 

• Cause of Imported Inflation: Price rises in fertiliser sectors  are on account of a sharp upsurge in international energy prices and supply constraints in major producing countries due to robust domestic demand, production cuts and export restrictions.

• Increasing Fertilizer subsidy: In order to minimize the impact of rising prices of inputs for farmers, the bulk of the prices has been absorbed by GOI through increasing fertilizer subsidies.

• Major reason for Fiscal deficit: The Fertiliser subsidy bill of the Government stood at ₹2 lakh crore in 2022-23 period and only second to the food subsidy in terms of expenditure causing huge burden on Fiscal consolidation.

• Shift in composition of fertilizer used: The composition of total plant nutrients in terms of the N,P,K ratio deviated considerably from the recommended NPK mix. It is  highly biased towards the Urea. 

• Ghost of Green Revolution: The Green Revolution launched by India in the 1960s to face the issue of food shortages also accelerated the adoption of high-yield crop varieties and intensive use of these fertilizers. 

• Agent of Global warming and Emission: The bulk of Urea applied to the soil is lost as NH3 (Ammonia) and Nitrogen Oxides causing emissions which is a Greenhouse gas.

• Health Hazard: India is the world’s largest importer of phosphorus which has Cadmium. These cadmium-laden fertilizers absorbed by crops, and consumed, bioaccumulates in our bodies causing disease such as Itai Itai disease. 

Advantages of One Nation, One Fertiliser (ONOF): 

• Provisions of the Scheme: Under the scheme, all fertilizer companies, State Trading Entities (STEs) and Fertiliser Marketing Entities (FMEs) will be required to use a single “Bharat” brand for fertilizers and logo. Eg - BHARAT Urea, BHARAT NPK etc 

• Reduce the cost of Fertiliser: A Uniform brand will aim to bring uniformity in the prices of Officially controlled (eg-Urea) & Unofficially controlled (eg- DAP & MOP) fertilizers.

• Normalization of Subsidies: Even though MRPs of Non-Urea fertilizers are de-controlled, under BHARAT brand GOI aims to informally indicate the prices to affordable rates. 

• Harmonizing markets: As Companies will stop selling Urea under Individual brands, there would be no need for Indian Farmers Fertiliser Cooperative (IFFCO) to move fertilizers across the states 

• Awareness among Farmers: It will make farmers aware about the cost of subsidies burden incurred by GOI and sensitize them for judicial use of fertilizers 

Way forward for further rationalization of the Fertiliser sector: 

Thus, it can be concluded that the Indian fertilizer sector needs a structural overhaul by building indigenous capacity, promoting  organic farming, nano urea and ONOF shall be modified to enhance further to achieve the aim of “Self-Sufficient” India as a subcomponent of Viksit Bharat by 2047.