Economic Survey Proposes Urea Price Hike, Direct Cash Transfers to Farmers

• The Economic Survey 2025-26 suggests a modest increase in urea retail price, unchanged since March 2018, coupled with direct cash transfers to farmers per acre.
• This shift from input subsidy to income support aims to correct a three-decade-old imbalance in fertilizer use, which has degraded soil quality and reduced crop yields.
• The N:P:K ratio has worsened significantly from 4:3.2:1 in 2009-10 to 10.9:4.1:1 in 2023-24, primarily due to excessive nitrogen application from subsidized urea.
• The Survey highlights that excess nitrogen reduces soil organic matter, depletes micronutrients, and increases nitrate leaching into groundwater, leading to plateaued or declining yields.
• The proposed system, leveraging India's digital agriculture infrastructure like Aadhaar-linked sales and PM-Kisan, would incentivize balanced fertilization and efficient nutrient use.

Why It Matters: Economic Survey recommends increasing urea prices and providing direct cash transfers to farmers to promote balanced fertilizer use.