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NBS (nutrient based subsidy on fertilisers)
What it is
The subsidy regime for phosphatic and potassic fertilisers, in place since 2010. Government fixes a subsidy per kilogram of nutrient - nitrogen, phosphorus, potassium and sulphur - rather than per bag, and manufacturers set MRP within that framework
Rates are notified for each kharif and rabi season. Urea sits outside NBS under separate statutory price control, so the two regimes operate side by side
Impact on industries
- Nutrient-linked pricing is the intended design strength - it lets relative prices steer farmers toward balanced NPK application rather than the nitrogen overuse that fixed urea pricing encourages
- Margin depends on a rate set twice a year against globally priced imported inputs, so a mid-season move in phosphate, potash or ammonia cannot be recovered until the next notification
- Subsidy receivables are a chronic working capital drain, since disbursement timing sits with the exchequer rather than the seasonal sales cycle
- Urea's exclusion keeps the price gap wide, blunting the balanced-nutrition objective NBS was designed to serve