Why does the Government of India promote the use of ‘Neem-coated Urea’ in agriculture?

Updated 11 Apr 2026 · From UPSC Prelims GS Paper I 2016, Q28

Contents18
UPSC Prelims GS2016Indian Economy
  1. ARelease of Neem oil in the soil increases nitrogen fixation by the soil microorganisms
  2. BNeem coating slows down the rate of dissolution of urea in the soil
  3. CNitrous oxide, which is a greenhouse gas, is not at all released into atmosphere by crop fields
  4. DIt is a combination of a weedicide and a fertilizer for particular crops
Show answer

Answer: (B) Neem coating slows down the rate of dissolution of urea in the soil

Answer: (b) Neem coating slows down the rate of dissolution of urea in the soil

Normal urea dissolves quickly - crops absorb only 30-40%, rest is wasted.

Neem-coated urea dissolves SLOWLY, releasing nitrogen gradually so crops absorb more (efficiency improves 15-20%).

Think of it as a 'slow-release capsule' for soil.

Why not others?

(a) Neem doesn't help nitrogen fixation by microorganisms - it slows urea dissolution.

(c) Neem REDUCES nitrous oxide but doesn't eliminate it. 'Not at all' makes this false.

(d) Neem-coated urea is not a weedicide combination.

Additional benefits:

  • Reduces diversion of subsidised urea for industrial use;
  • Acts as mild insecticide.

Referenced in Economic Survey 2015-16.

Why this was asked

Neem-coated urea improves nitrogen use efficiency from 30-40% to around 50-60%, reducing fertilizer subsidy burden which costs the government tens of thousands of crores annually.

The Economic Survey 2015-16 specifically highlighted neem-coated urea policy, making it a relevant current affairs topic for the 2016 exam.

UPSC is testing whether students understand the scientific mechanism behind slow-release fertilizers versus just knowing that neem-coated urea exists as a government scheme.

Neem-Coated Urea

Indian Economy Neem-coated Urea urea nitrogen fixation

Neem-Coated Urea: Mechanism & Benefits for UPSC

Must know

Neem coating slows urea dissolution - releases nitrogen gradually for better crop absorption

Improves nitrogen use efficiency from 30-40% to 50-60%

Good to know

Reduces diversion of subsidized urea to industrial use

Acts as mild insecticide due to neem's natural properties

The Problem

Regular urea dissolves rapidly in soil - crops can absorb only 30-40% of applied nitrogen. The rest is lost through volatilization, leaching, or conversion to greenhouse gases, wasting fertilizer subsidy and harming environment.

Regular vs Neem-Coated Urea

Aspect

Regular Urea

Neem-Coated Urea

Dissolution Rate

Fast (immediate release)

Slow (gradual release)

Nitrogen Use Efficiency

30-40%

50-60%

Application Frequency

Multiple applications needed

Fewer applications required

Industrial Diversion

High risk

Reduced (neem smell deters)

Pest Control

None

Mild insecticidal effect

How Neem Coating Works

%%{init: {"flowchart": {"wrappingWidth": 460}}}%%
flowchart TD
  s1["`**Neem Oil Coating**
Urea granules coated with **neem oil** extract`"]
  s2["`**Slow Dissolution**
Coating **delays water penetration** into urea granules`"]
  s3["`**Gradual Release**
Nitrogen released **slowly over 45-60 days** vs 7-15 days`"]
  s4["`**Better Absorption**
Crops get **steady nitrogen supply** matching growth needs`"]
  s5["`**Higher Efficiency**
**15-20% improvement** in nitrogen use efficiency`"]
  s1 --> s2
  s2 --> s3
  s3 --> s4
  s4 --> s5

Additional Benefits

Economic: Reduces fertilizer subsidy burden by improving efficiency per unit

Environmental: Lower nitrous oxide emissions (though not eliminated completely)

Administrative: Neem smell makes diversion to industries less attractive

Integrated approach: Combines fertilization with mild pest management

Question Analysis

This question tests understanding of controlled-release fertilizers. The correct answer (B) focuses on the core mechanism - slowing dissolution rate. Option A incorrectly links neem to nitrogen fixation by microorganisms, which is unrelated to urea's function.

Exam traps

Trap A: Neem doesn't enhance nitrogen fixation - that's done by Rhizobium bacteria in legume roots, not urea

Trap C: 'Not at all released' is too absolute - neem reduces but doesn't eliminate nitrous oxide

Trap D: Neem-coated urea isn't a weedicide - it's purely a slow-release nitrogen fertilizer

Nitrogen Fertilizers in India

Indian Economy fertilizer nitrogen

Major Nitrogen Fertilizers: Types & Characteristics

Must know

Urea contains highest nitrogen content (46%) - most popular fertilizer

DAP and NPK are complex fertilizers with multiple nutrients

Good to know

India imports 85% of urea requirements despite being major producer

Major Nitrogen Fertilizers

Fertilizer

Nitrogen Content

Other Nutrients

Key Features

Urea

46%

None

Highest N content, water-soluble, most subsidized

DAP

18%

P: 46%

Diammonium Phosphate, good for root development

NPK

Varies

P & K in ratios

Balanced nutrition, multiple grades available

Ammonium Sulphate

21%

S: 24%

Also provides sulphur, acidic nature

CAN

26%

Ca: 19%

Calcium Ammonium Nitrate, less volatile loss

Urea Dominance in India

Price advantage: Highest nitrogen per rupee due to heavy subsidies

Farmer preference: Easy to apply, quick visible results on crops

Overuse problem: Leads to nutrient imbalance - excess N, deficient P & K

Policy focus: Government promotes balanced fertilization through soil health cards

Exam traps

Don't confuse nitrogen fertilizers with nitrogen fixation - fertilizers provide external N, fixation captures atmospheric N

Urea has 46% nitrogen - remember this specific number for calculations

DAP is phosphorus-rich (46% P) but has significant nitrogen (18%) too

Fertilizer Subsidy in India

Indian Economy

India's Fertilizer Subsidy: Policy & Challenges

Must know

Nutrient Based Subsidy (NBS) for P&K fertilizers since 2010, urea still under statutory pricing

Fertilizer subsidy is ₹80,000+ crore annually - major fiscal burden

Good to know

Industrial diversion of subsidized urea is major leakage problem

Subsidy Systems

Fertilizer Type

Subsidy Method

Price Control

Key Features

Urea

Statutory pricing

MRP fixed by govt

Uniform price across India, highest subsidy per unit

DAP/NPK

Nutrient Based Subsidy

Market determined

Companies set MRP, govt gives per-nutrient subsidy

SSP

No subsidy

Market rates

Single Super Phosphate, decontrolled since 1992

Policy Challenges

Fiscal burden: Subsidy bill exceeds ₹80,000 crore, straining government finances

Nutrient imbalance: Cheap urea leads to overuse of nitrogen, soil degradation

Leakages: Industrial use of subsidized urea (for making adhesives, plastics)

Import dependence: India imports 85% of urea despite domestic production

Reform Measures

Neem-coated urea: Reduces industrial diversion, improves efficiency

Direct Benefit Transfer (DBT): Piloted for fertilizer subsidy in some states

Soil Health Cards: Promote balanced fertilization based on soil testing

City Compost: Encouraging organic alternatives to reduce chemical dependence

Nitrogen in Soil & Agriculture

Environment nitrogen fixation soil microorganisms

Nitrogen Cycle & Agricultural Applications

Must know

Biological nitrogen fixation by bacteria converts atmospheric N₂ to ammonia

Rhizobium bacteria form symbiotic relationship with legume roots

Fertilizers provide readily available nitrogen - different from biological fixation

Atmospheric Nitrogen Challenge

Atmosphere is 78% nitrogen but plants cannot use gaseous N₂ directly. It must be 'fixed' into ammonia (NH₃) or nitrate (NO₃⁻) forms. This happens through biological fixation, industrial processes, or lightning.

Biological Nitrogen Fixation

%%{init: {"flowchart": {"wrappingWidth": 460}}}%%
flowchart TD
  s1["`**Atmospheric N₂**
Gaseous nitrogen unavailable to plants`"]
  s2["`**Bacterial Enzyme**
**Nitrogenase enzyme** breaks strong N≡N bonds`"]
  s3["`**Ammonia Formation**
N₂ converted to **NH₃** (ammonia)`"]
  s4["`**Plant Absorption**
Plants absorb NH₃ or oxidized forms (NO₃⁻)`"]
  s5["`**Protein Synthesis**
Nitrogen incorporated into amino acids and proteins`"]
  s1 --> s2
  s2 --> s3
  s3 --> s4
  s4 --> s5

Sources of Soil Nitrogen

Source

Mechanism

Examples

Agricultural Use

Biological Fixation

Bacteria convert N₂ to NH₃

Rhizobium in legume nodules

Crop rotation with pulses

Industrial Fixation

Haber-Bosch process

Urea, DAP manufacturing

Direct fertilizer application

Organic Sources

Decomposition releases N

Compost, FYM, green manure

Sustainable farming practices

Lightning

Electric discharge fixes N₂

Natural nitrate formation

Minimal contribution

Legume-Rhizobium Partnership

Symbiotic relationship: Rhizobium gets carbohydrates from plant, provides fixed nitrogen

Root nodules: Visible swellings on legume roots contain nitrogen-fixing bacteria

Crop examples: Pulses (gram, lentil), fodder crops (lucerne, berseem)

Soil enrichment: After harvest, nodules decompose and release nitrogen for next crop

Exam traps

Key distinction: Nitrogen fixation is by bacteria (biological), not by fertilizers (chemical)

Neem doesn't fix nitrogen - it only slows urea dissolution rate

Only leguminous plants have Rhizobium partnership - cereals don't fix nitrogen