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PM PRANAM SCHEME

20th September, 2022 Economy

 

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Context

  • In order to reduce the use of chemical fertilizers by incentivizing states, the Union government plans to introduce a new scheme – PM PRANAM.

 

PM PRANAM Scheme

  • PM PRANAM stands for PM Promotion of Alternate Nutrients for Agriculture Management Yojana.
  • Aim: The proposed scheme intends to reduce the subsidy burden on chemical fertilisers, which is expected to increase to Rs 2.25 lakh crore in 2022-2023. This is 39% higher than the previous year’s figure of Rs 1.62 lakh crore.

Working of the Scheme

  • The scheme will not have a separate budget and will be financed by the “savings of existing fertiliser subsidy” under schemes run by the Department of Fertilizers.
  • Further, 50% subsidy savings will be passed on as a grant to the state that saves the money.
  • 70% of the grant provided under the scheme can be used for asset creation related to technological adoption of alternate fertilizers and alternate fertiliser production units at village, block and district levels.
  • The remaining 30% grant money can be used for incentivizing farmers, panchayats, farmer producer organisations and self-help groups that are involved in the reduction of fertiliser 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. Data available on a fertiliser Ministry dashboard, iFMS (Integrated fertilisers Management System), will be used for this purpose.

How much fertiliser does India require?

  • 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 fertiliser 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 fertiliser 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 fertiliser for the kharif season.

 

Significance of PM Pranam Scheme

  • Due to increased demand for fertiliser in the country over the past 5 years, the overall expenditure by the government on subsidy has also increased.
  • The total requirement of four fertilisers — Urea, DAP (Di-ammonium Phosphate), MOP (Muriate of potash), NPKS (Nitrogen, Phosphorus and Potassium) — increased by 21% between 2017-2018 and 2021-2022.
  • In light of the increased demand, the government has also been increasing the subsidies it provides for chemical fertilisers.
  • In the Union Budget 2021-22, the government had budgeted an amount of Rs 79,530 crore, which increased to Rs 1.40 lakh crore in the revised estimates (RE). However, the final figure of fertiliser subsidy touched Rs 1.62 lakh crore in 2021-22.

  • PM PRANAM, which seeks to reduce the use of chemical fertiliser, 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 fertilisers or alternative fertilisers in the last few years.

India meets about 75-80% of the volume of consumption of urea from domestic production while the rest is imported from Oman, Egypt, the UAE, South African and Ukraine.

Nearly half of its DAP requirement are imported via (mainly from West Asia and Jordan) while the domestic MoP demand is met solely through imports (from Belarus, Canada and Jordan, etc).

MUST READ: COMPREHENSIVE ARTICLE ON FERTILIZER SUBSIDY: https://www.iasgyan.in/daily-current-affairs/fertiliser-subsidy-47

ALSO READ: https://www.iasgyan.in/daily-current-affairs/nano-urea-and-urea-sector

https://indianexpress.com/article/explained/explained-economics/what-is-the-pm-pranam-scheme-fertilisers-8160344/

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