The Nutrient Based Subsidy (NBS) Scheme is a central sector scheme of the Government of India, launched by the Department of Fertilizers, Ministry of Chemicals and Fertilizers. It was introduced on April 1, 2010, as a major policy shift to make Phosphatic and Potassic (P&K) fertilizers available to farmers at affordable prices. The scheme was created to solve the problem of skewed fertilizer use, particularly the overuse of nitrogen-based fertilizers like Urea, by promoting balanced nutrient application for sustainable agriculture.
The mechanism of the NBS Scheme involves the government providing a fixed amount of subsidy per kilogram of nutrient—Nitrogen (N), Phosphorus (P), Potash (K), and Sulphur (S). This fixed subsidy rate is decided on an annual or bi-annual basis and is paid directly to the fertilizer manufacturers or importers. Under the NBS framework, the P&K fertilizer sector is decontrolled, allowing companies to fix the Maximum Retail Price (MRP) at reasonable levels, which the government monitors. The scheme currently covers 28 grades of P&K fertilizers, including Di-Ammonium Phosphate (DAP).
A key concept connected to the NBS is the exclusion of Urea, which remains under a separate price control mechanism with a fixed MRP. The scheme's operational management and compliance are monitored through the Integrated Fertilizer Management System (iFMS). Recently, the scheme was amended to expand the number of covered P&K fertilizer grades from 25 to 28 starting from Kharif 2024. While the core principle of a nutrient-based subsidy for non-urea P&K fertilizers has remained constant, the subsidy rates are revised periodically, such as for the Kharif 2026 season (April 1 to September 30, 2026), to align with global price trends.