Author(s): K. V. Praveen, K. S. Aditya, M. L. Nithyashree and A. Sharma

Abstract: Use of fertilizers in India are promoted primarily by means of subsidies. Subsidies are however blamed for increasing fiscal burden and distorting soil nutrient ratio. An attempt is made here to study fertilizer subsidies in India and equity in its distribution. Fertilizer consumption and corresponding subsidy distribution across crops, states and farmer classes are studied. Impact of Nutrient Based Subsidy scheme on subsidies as well as on nutrient use ratio is also attempted. Analysis indicated fertilizer subsidy distribution to be biased in favour of some crops and states, contrary to fair degree of equity that existed in inter-class distribution. Nutrient based subsidy scheme, implemented to control mounting subsidies and to ensure soil nutrient balance could not achieve its targets so far. Indications on extent of inequity in fertilizer subsidy distribution emerging out of this study could help in re-targeting the subsidies to the deserving crops, regions and farm categories.

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