The last eleven years under Prime Minister Narendra Modi have witnessed a fundamental change in how government systems engage with the citizens, particularly in sectors long marked by inefficiency and leakage. The driving force behind this transformation has been the PM Modi-led government’s strong push for process reforms – which are quiet, systemic changes that strengthen delivery, reduce misuse of resources, and establish trust.

The most impactful of these changes in the agriculture sector has been the shift to 100 percent neem-coated urea introduced in 2015.

Urea has long been central to Indian agriculture, but its poor management has led to inefficiency and diversion. The Modi government, by mandating all urea to be coated with neem, has eliminated large-scale diversion of subsidised urea to non-agricultural uses effectively – yielding transformative results and saving the exchequer an estimated Rs. 10,000 crores by preventing diversion and misuse of subsidised urea.

Fertiliser Management Before 2014

The urea subsidy regime until 2014 was characterised by inefficiencies. The system failed to deliver effectively despite the government spending over Rs. 50,000 crore – with large quantities of urea being diverted to non-agricultural uses. Chemical industries benefited from this diversion, leading to artificial urea shortages during crucial sowing seasons. This situation created considerable hardship for farmers, who faced erratic urea supply, rising input costs, and declining soil health – made worse by overuse, as only 25 percent of the urea was neem-coated at the time.

Despite the large subsidy outlay, the continued misuse of urea, caused by weak processes – meant that farmers saw little improvement in yields or overall benefits.

The Reform: Neem Coating All Urea Across India

PM Modi’s government responded decisively with a simple intervention in 2015 to address the systemic delivery failure. The government mandated that all subsidised urea, domestic and imported, be 100 percent neem-coated. Neem, as a natural inhibitor, slows the release of nitrogen and improves nutrient uptake. More importantly, neem coating rendered the urea unusable for industrial applications – eliminating a major source of diversion.

By focusing on streamlining one critical point in the supply chain – production - the reform ensured the non-diversion of urea. The government set up a coating infrastructure across all manufacturing units and ports. The entire country’s urea supply – over 340 lakh metric tonnes annually, was neem-coated in December 2015. The process was transparent, scalable, and efficient – ensuring the product delivered to farmers was tamper-proof and purpose-specific.

A Process Reform in Action

Neem-coated urea is an archetypal process reform, which reformed not the policy structure or the quantum of subsidy, but the way the system operates. The Modi government ensured greater efficiency, accountability, and farmer satisfaction by transforming the form and flow of urea. The government, without disrupting the existing policy structure, addressed a major bottleneck that had existed for years.
In line with other initiatives introduced under PM Modi, neem-coated urea is reflective of the government’s policy of fixing the process to improve the outcome. It has reduced leakages, simplified delivery, and restored the integrity of a public good.

PM Modi’s Farmer-First Vision

The reform reflects the Prime Minister’s broader vision of empowering farmers through tangible change rather than empty slogans. As PM Modi has noted himself, the government’s decision to neem-coat urea has reduced the input costs of farmers. Improved nitrogen use efficiency has reduced the amount of urea needed per acre, leading to higher yields, healthier soils, and increased farmer incomes. All this has been achieved without increasing the quantum of urea subsidy, resulting in additional savings.

With an investment of ₹40,000 crore, the government has strengthened self-reliance by reviving fertiliser plants in Gorakhpur, Talcher, Sindri, Barauni, and Ramagundam. A new fertiliser plant approved in Namrup, Assam, further reinforces this long-term vision.

Transformative Impact for Farmers and the Future

The neem-coated urea reform has delivered a lasting impact – on the ground and in the larger ecosystem. Farmers across the country have reported reduced input costs, improved productivity, and healthier soils. A report published by researchers from the Institute for Social and Economic Change (ISEC) has confirmed these outcomes – noting increased yields and net return across major crops such as paddy, maize, sugarcane, tur, jute, and soyabean. Reduction in reliance on pesticides, along with improved nitrogen efficiency, was confirmed in the study. Neem-coating has helped reduce chemical runoff and groundwater contamination – resulting in significant ecological benefits. The pesticidal properties of neem have significantly lowered the need for synthetic plant protection chemicals – contributing to more sustainable farming practices. At the macro level, the reform also curbed subsidy leakages, saving the government an estimated Rs. 10,000 crores by preventing urea diversion to non-agricultural uses.
Neem-coated urea is a quiet but powerful example of process-driven governance—restoring delivery integrity, empowering farmers, and protecting resources without adding to the fiscal burden.
As India advances toward its vision of Viksit Bharat, reforms like neem-coated urea represent a quiet but effective model of governance – one that delivers results and builds trust on the ground. Such process reforms are silently laying the foundation of a stronger, self-reliant, and leading Bharat.