Chemical fertilisers are key element of modern technology and have played an important role in agricultural productivity growth in India. However, the demand-supply gap of fertilisers in India has increased in recent times, thereby leading to increased dependency on imports.

There is a general view in academic and policy circles that fertiliser subsidies are concentrated geographically on a relatively small number of crops and producers. In many cases they do not reach the targeted group(s).

This paper examines trends in fertilizer subsidy and the issue of distribution of fertilizer subsidies between farmers and fertilizer industry, across regions/ states, crops and different farm sizes.Says that the proposed policy of direct transfer of fertiliser subsidy to farmers is misconceived and inappropriate.