Alluding to direct benefit transfer [DBT] of fertilizer subsidy, in budget speech for 2016-17, finance minister, Arun Jaitely had stated :- “We have already introduced DBT in LPG. Based on this successful experience, we propose to introduce DBT on pilot basis for fertilizer in few districts in the country with a view to improving quality of service delivery to the farmers.” As a follow up, DBT of fertilizer subsidy is now in operation on a pilot basis in 11 districts viz. West Godavari, Krishna and Rangareddi [Andhra Pradesh]; Una [Himachal Pradesh]; Hoshangabad [Madhya Pradesh], Pali [Rajasthan], Krishnaganj [Bihar], Karnal and Kurukshetra [Haryana]; Nashik and Raigarh [Maharashtra] From the next kharif season beginning April, 2017, the scheme will be launched in...
More
No comments
Category: Fertilizers
Will DBT work?
The version of DBT being tried in pilot districts is flawed. It will provide no proper assessment of the scheme’s effectiveness. Alluding to the direct benefit transfer (DBT) of fertiliser subsidy, in budget speech for 2016-17, Finance Minister Arun Jaitley had stated: “We have already introduced DBT in LPG. Based on this successful experience, we propose to introduce DBT on pilot basis for fertiliser in a few districts in the country with a view to improving quality of service delivery to the farmers.” The focus on the DBT has its link to a revelation made in Economic Survey (2015-16). It stated that “24% of the fertiliser subsidy is spent on inefficient producers, 41% is diverted to non-agricultural uses and 24%...
More
No comments
IDEA IS GRAND, BUT WILL IT WORK WELL?
Running a pilot project on DBT for fertiliser by itself does not ensure that the scheme will actually be launched. Moreover, the project is deeply flawed Alluding to direct benefit transfer (DBT) of fertiliser subsidy, in his Budget speech for 2016-17, Union Minister for Finance Arun Jaitley had stated: “We have already introduced DBT in LPG. Based on this successful experience, we propose to introduce DBT on pilot basis, for fertiliser in a few districts in the country, with a view to improving quality of service delivery to the farmers.” The focus on DBT links with a revelation made in the Economic Survey (2015-16). It stated that “24 per cent of the fertiliser subsidy is spent on inefficient producers, 41...
More
No comments
Fertilizer DBT ‘pilots’ – old wine in new bottle
Even as Modi – government has taken plenty of action on reforming a variety of subsidy schemes viz., LPG, food, kerosene etc during the last 30 months of its stint, fertilizer subsidy has received scant attention. In his budget speech for 2016-17, finance minister, Arun Jaitely stated :- “We have already introduced a direct benefit transfer (DBT) in LPG. Based on this successful experience, we propose to introduce DBT on pilot basis for fertilizer in few districts in the country with a view to improving quality of service delivery to the farmers.” The focus on DBT links up with a startling revelation made in the Economic Survey [2015-16]. It stated that “24% of the fertilizer subsidy is spent on inefficient...
More
No comments
Neem-coated urea: Why is Narendra Modi govt waiting for 5 years to make India self-sufficient in fertilisers?
Addressing the 9th Global Agriculture Leadership Summit on September 8, 2016, chemicals and fertiliser minister, Ananth Kumar proclaimed that neem-coating of all urea supplies meant for use by farmers has resulted in elimination of diversion to chemical industries and smuggling to neighbouring countries. If, the claim is true, it will have a profound impact on the larger picture of demand-supply balance, self-sufficiency in fertilisers, dependence on import, subsidy pay-out, demand for hydrocarbons especially gas and impact on the environment. The total consumption of urea is about 30 million tonnes annually, including 22 million tonnes indigenous and 8 million tonnes of imported product. Since, all of this is sold by manufacturers/importers at a low ‘controlled’ price, excess of cost of production/import...
More
No comments
Gains from neem coating urea – real or imaginary!
The exhortations by prime minister, Modi and his cabinet colleague, chemicals and fertilizer minister, Ananth Kumar regarding the success of neam coating of urea [ordered by Modi last year to cover all of domestic production and import] could have much deeper ramifications than mere stoppage of diversion to industrial use and smuggling to neighboring countries. The total consumption of urea in India is about 30 million tons annually including 22 million ton indigenous and 8 million tons imported. Since, all of this is sold by manufacturers/importers at a low ‘controlled’ price under the Fertilizer Control Order [FCO], the excess of cost of production/import and distribution over this price is reimbursed to them as subsidy by Government of India [GOI]. For...
More
No comments
MAKING DBT FERTILISER A REALITY
Considering the perceptible impact of DBT for fertiliser subsidies on stakeholders, it is imperative that the Government comes out with a roadmap so that the beneficiaries get adequate time to prepare for the transition Speaking at the inaugural session of the ninth Global Agriculture Leadership Summit on September 8, in New Delhi, Union Minister for Chemicals and Fertilisers, Ananth Kumar said that the Government was committed to implement direct benefit transfer (DBT) for fertiliser subsidy to farmers. But he failed to give a time-frame. Drawing a parallel with liquefied petroleum gas where DBT has already been successfully implemented, he opined that things are much more complex in the fertiliser case. He said the Government would take a call on this...
More
No comments
DBT for fertilizers – where is the ‘road-map’?
Inaugurating the 9th Global Agriculture Leadership Summit on September 8, 2016 in New Delhi, the union minister for chemicals and fertilizers, Ananth Kumar said that the government is committed to implement direct benefit transfer [DBT] of subsidy on fertilizers but avoided giving a time frame. Drawing a parallel with LPG [liquefied petroleum gas] where DBT has already been successfully implemented, he opined that things are much more complex here and the government will take a call on this only after successful conduct of trial runs which are currently under way in certain districts of the country. All that is fine but every stakeholder viz., farmer, manufacturer, importer, distributor/dealer etc has a right to know as to how he/she will be...
More
No comments
Tata exit from fertilizers – symptomatic of deeper malaise
Tata Chemicals Limited [TCL] made headlines on August 10, 2016 by announcing sale of its urea business [it has a plant in Babrala, Uttar Pradesh with 700,000 tons ammonia and 1.2 million ton urea capacity] to Yara Fertilizers India Private Limited [YFIL] – Indian arm of Norway’s Yara lnternational ASA – for a sum of Rs 2670 crores [after obtaining all regulatory approvals and court sanction, the transaction will be consummated within 9-12 months]. TCL had decided to exit fertilizers long back. However, a number of earlier attempts had failed as it did not find any taker; even this one is a distress sale and will fetch the company only 2/3rd of the money so far invested. Tata has also...
More
2 comments
GST will boomerang on fertilisers
Even if the lower end of 12% is applied to fertilisers, it would be double the existing duty Given the critical role of fertilisers in ensuring food security, for decades, the government has followed a policy of controlling their prices at low level—unrelated to cost of supply—and reimbursing the excess as a subsidy to the manufacturers. The Goods and Services Tax is being billed as transformative reform that has the potential to drastically reduce transaction costs — owing to elimination of cascading effect of tax-on-tax and withdrawal of a host of local levies— and substantially increase efficiency across the supply chain as interface with multiple authorities over a number of geographical locations gets eliminated. For the fertiliser industry, however, the...
More
No comments