New Delhi, Jan 29 (PTI) The Economic Survey 2025-26 called for a "modest increase" in the retail price of urea -- unchanged since March 2018 at Rs 242 per 45-kg bag -- while transferring an equivalent
amount directly to cultivators on a per-acre basis.
The proposed shift from input subsidy to income support aims to correct a three-decade-old imbalance in fertiliser use that is degrading soil quality and undermining crop yields, the document, tabled in Parliament on Thursday, stated.
The Survey flagged that the nitrogen-phosphorus-potassium (N:P:K) ratio used by Indian farmers has deteriorated sharply from 4:3.2:1 in 2009-10 to 10.9:4.1:1 in 2023-24, driven by excessive nitrogen application through subsidised urea. Agronomic benchmarks suggest a ratio closer to 4:2:1 for most crops and soil types.
"A more durable correction requires re-anchoring fertiliser decisions in soil and crop requirements rather than in administered price distortions," the Survey said, proposing to separate farmer income support from fertiliser purchase by allowing nutrient prices to reflect agronomic scarcity.
SOIL DEGRADATION
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The Survey documented how excess nitrogen reduces soil organic matter, accelerates micronutrient depletion, weakens soil structure and increases nitrate leaching into groundwater. In several irrigated belts, yield response to fertiliser has plateaued or declined even as application rates have risen—reflecting not under-use of inputs but their misallocation across nutrients.
"Over time, crops require progressively larger quantities of fertiliser to maintain yields, raising input intensity without commensurate output gains," it said.
While India has undertaken measures like nutrient-based pricing, neem-coating of urea and Aadhaar-linked point-of-sale verification, these operate largely on the supply side without altering the core economic signal farmers face when choosing nutrients.
ZONE-SPECIFIC TRANSFERS
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Under the proposed approach, farmers would receive the same overall purchasing power but nitrogen's relative price would move closer to its agronomic cost. Those applying nitrogen efficiently would gain by receiving the full transfer while spending less at retail counters. Over-users would face clear incentives to shift towards balanced fertilisation, soil testing, nano-urea and organic amendments.
The Survey recommended indexing transfers to agro-climatic zones and cropping patterns, recognising that rice-wheat belts and sugarcane tracts legitimately use more nitrogen than rain-fed coarse cereals or pulses. Zone- and crop-specific benchmarks would ensure structural differences in agronomic demand are recognised while rewarding efficiency within each category.
India's digital agriculture infrastructure -Aadhaar-linked fertiliser sales, real-time tracking through the Integrated Fertiliser Management System, and the PM-Kisan platform - makes such a reform operationally feasible, the Survey said.
PHASED ROLLOUT
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It proposed piloting the approach across agro-climatic regions covering irrigated, rain-fed and mixed systems to calibrate crop- and zone-specific benchmarks before national expansion. One design issue flagged was tenancy, where transfers may accrue to landowners while renters cultivate the land.
"The objective is not to compress fertiliser use but to re-align it with crop physiology and soil biology," the Survey said, adding that corrected nutrient ratios would raise yield response and reduce total fertiliser required per tonne of grain over time. PTI LUX LUX MR
