What is PM-PRANAM scheme? Why is it needed?

The Centre is introducing the PM-PRANAM scheme to encourage states to cut down on the use of fertilisers and promote healthy alternatives. Since the government also protects farmers against high global prices of fertilisers through subsidies, the proposal will likely reduce the burden on the exchequ

FP Explainers September 20, 2022 15:09:28 IST
What is PM-PRANAM scheme? Why is it needed?

Representational image. News18 Hindi

The Centre will soon introduce its Pradhan Mantri-Promotion of Alternate Nutrients for Agriculture Management Yojana (PM-PRANAM) to encourage states to cut down on their use of fertilisers.

The government under the proposed scheme will reduce the subsidy on chemical fertilisers which is expected to increase to Rs 2.25 lakh crore in 2022-2023 – a 39 per cent hike compared to the previous year’s Rs 1.62 lakh crore.

Let’s take a closer look at the scheme

How will it work?

As per Jagran Josh, the Centre will make the determination by comparing a state’s use of chemical fertilisers in a given year to its average usage in the past three years.

The fertiliser ministry dashboard (Integrated fertilisers Management System will be used by the Centre to make the necessary calculations.

How will it be funded?

There will be no separate funding for this scheme.

A source told Indian Express the scheme would be financed by the ‘savings of existing fertiliser subsidy’ and that 50 per cent savings would be passed on to states that save money and that 70 per cent of the grant under the scheme would be used to create assets related to using alternate fertilisers and their production at village, block and district levels.

The rest 30 per cent grant would be used to aid farmers, panchayats, farmer producer organisations and self-help groups involved in reducing fertiliser use and generating awareness, as per the report.

Why is it needed?

Because of the 21 per cent increase in the need for four fertilisers.

As per Jagran Josh, Bhagwanth Khuba, Minister of State for Chemicals and Fertilizers told Lok Sabha in August that the use of Urea, Di-ammonium Phosphate (DAP), Muriate of potash (MOP), and Nitrogen, Phosphorus and Potassium )NPK), has increased from 528.86 lakh metric tonnes in 2017-18 to 640.27 lakh metric tonnes (LMT) in 2021-22.

The Centre is thus intending to introduce this scheme to promote the balanced use of fertilisers or alternative fertilisers, as per CNBC.

Then there’s the not-so-small matter of government subsidies.

The Centre subsidises farmers against high global prices of fertilisers. In May, the finance ministry announced an additional fertiliser subsidy of Rs 1.10 lakh crore this year.

“Despite rising fertiliser prices globally, we have protected our farmers from such price hikes. In addition to the fertiliser subsidy of Rs 1.05 lakh crore in the budget, an additional amount of Rs 1.10 lakh crore is being provided to further cushion our farmers,” PTI quoted finance minister Nirmala Sitharaman as saying.

According to official records, the government has allocated Rs 79,530 crore as fertiliser subsidy in the Union Budget 2021-22, which increased to Rs 1.40 lakh crore in the revised estimates (RE). The final figure touched Rs 1.62 lakh crore in 2021-22.

In 2022-23, the government has budgeted Rs 1.05 lakh crore. However, the fertilizer minister has said that the subsidy figure could cross Rs 2.25 lakh crore during the year.

When will it be introduced?

Soon.

Sources told Indian Express top officials of the Union Ministry of Chemicals and fertilisers, who first mooted the proposal, shared information about the scheme to state government officials during the National Conference on Agriculture for Rabi Campaign on 7 September.

The ministry has also sought their suggestions on the features of PM-PRANAM, sources further added.

Sources said the ministry has begun inter-ministerial discussions on the proposed scheme and that its draft will be completed after incorporating the views of the departments concerned.

With inputs from agencies

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