The chemical and synthetic fertilizers, particularly Nitrogen, Phosphorous and Potassium (NPK), are highly subsidized. The amount of subsidy on this has grown exponentially during the last three decades from a mere Rs. 60 crore during 1976-77 to an astronomical Rs. 40,338 crore during 2007-08. In 2008-09, it shot up to Rs 96,606 crores. The budget allocation for 2009-10 for fertilizer subsidies was Rs 3 49,980 crores and is having similar estimate for 2010-11 . This huge rise in subsidy is attributed to inflation, and subsequent price fluctuations in the international fertilizer market. On a real term basis also, the fertilizer subsidy allocation has been showing a rising
trend. Huge amount of subsidy allocation provided directly to the industry has led to indiscriminate production and availability while neglecting the locally available knowledge on soil nutrient management. Widespread usage of such fertilizers has resulted in the degradation of natural resource base, especially soil. It is now threatening the food security of the country and has sparked of a debate.