The union government seems to have made a good beginning in regard to achieving its fiscal consolidation goals for the current year. During the first quarter ending June 30, 2018, the fiscal deficit [excess of total receipts over total expenditure] is Rs 429,033 crore which is 68.5% of the annual target set in the budget. The corresponding figure for the first quarter of last year was 81%. This is commendable when seen in conjunction with a substantial jump in capital expenditure to about Rs 87,000 crore during the quarter ending June 30, 2018, an increase of 27% over the corresponding quarter of last year. This is 29% of the full year target. A key feature of the emerging trend is...
More
No comments
Category: Fertilizers
FLEDGLING FERTILISER REFORMS
Successive Governments have lamented an increase in fertiliser subsidy and its destabilising effect on the fiscal situation. Yet, they have failed to address the real issue The price of domestic gas has been increased from the existing $ 2.89 per million British thermal unit (mmBtu) on net calorific value basis to $3.06 per mmBtu for a six-month period beginning April 1. The hike, taking the price back to the level reached two years ago, has brought to the fore some niggling questions which successive ruling dispensations have dodged for several decades. First, who pays for the extra price that user industries — mainly fertilisers (besides power, CNG and PNG) — shell out? The urea industry alone requires over 45 million standard cubic...
More
No comments
Rising gas price, fledgling fertilizer reform
The price of domestic gas is expected to go up from existing US$ 3.21 per million British thermal unit [mBtu] [on net calorific value basis] to US$ 3.40 per mBtu for six month period beginning April 1, 2018. The hike taking the price back to the level reached two years ago – has brought to the fore some niggling questions which successive ruling dispensations have dodged for several decades. First, who pays for the extra price that user industries – mainly fertilizers [besides power, CNG and PNG] – shell out? The urea industry alone requires over 45 million standard cubic meter [mmscmd] of gas as against total domestic supply of 90 mmscmd. The maximum retail price [MRP] of urea is...
More
No comments
Govt’s fertiliser DBT neither direct nor full benefit
The Cabinet has approved direct benefit transfer (DBT) of fertiliser subsidy. However, the subsidy will continue to be routed through fertiliser manufacturers. They will receive 100% of the subsidy amount after fertiliser is delivered to the farmer and his identity, namely Aadhaar (and other details such as plot size, crop, nutrient use), is captured on the electronic point of sale (e-PoS) machine. At present, manufacturers sell urea at the maximum retail price (MRP), which is controlled by the Union government at a low level, and get subsidy reimbursement on unit-specific basis under the new pricing scheme (NPS). On the other hand, manufacturers of non-urea fertilisers are theoretically given ‘uniform’ subsidy (on per nutrient basis) under the nutrient-based scheme (NBS). However,...
More
No comments
DBT fertilizer – this is not what doctor ordered!
The Cabinet has approved direct benefit transfer [DBT] of fertilizer subsidy. However, the subsidy will continue to be routed through fertilizer manufacturers. They will receive 100% of the subsidy amount after fertilizer is delivered to the farmer and his identity viz. Aadhaar [and other details such as plot size, crop, nutrient use] is captured on the electronic point of sale [e-PoS] machine. At present, manufacturers sell urea at the maximum retail price [MRP] controlled by union government at a low level and get subsidy reimbursement on unit-specific basis under the new pricing scheme [NPS]. On the other hand, manufacturers of non-urea fertilizers viz. DAP/MOP/SSP/complexes theoretically are given ‘uniform’ subsidy [on per nutrient basis] under the nutrient based scheme [NBS]. However,...
More
No comments
Rejuvenating Indian soils – shun flawed policies
According to a 10 year study “The Indian Nitrogen Assessment” carried out by the Indian Nitrogen Group [ING] for Down To Earth [DTE] – a New Delhi-based environment and health magazine – Nitrogen-based fertilizers like urea, which have been instrumental in increasing crop yields in India, are now turning into potent destroyers by polluting land and water, affecting people’s health and leading to climate change. The study says that “agriculture is the main source of nitrogen pollution in India; further cereals like rice and wheat accounting for maximum cropped area pollute the most”. In the past five decades, every Indian farmer has, on an average, used up over 6,000 kg of urea or 120 kg annually. Only 33 per cent...
More
No comments
Stopping fertilizer subsidy misuse – Aadhaar authentication alone won’t help
In the Union Budget for 2018-19, the finance minister, Arun Jaitely has made a provision of Rs 70,080 crore for fertilizer subsidy which is just about Rs 5000 crore higher than the revised estimate [RE] for 2017-18 at Rs 65,000 crore and almost the same as the budget estimate [BE] of Rs 70,000 crore for that year. The international price of crude oil during the ensuing year is projected to be 15-20% higher. Considering that the international prices of urea as also raw materials/feedstock [natural gas, phosphoric acid, ammonia, sulfur] also increase in tandem and India is heavily dependent on their imports, the requirement for subsidy would be higher. Add to this carry forward of over Rs 30,000 crore from...
More
No comments
Urea subsidy – price for populism and greed
With pressure building on union budget, it is time to take a re-look at fertilizer subsidy which was allocated Rs 70,000 crores during 2017-18 and is a major factor contributing to high fiscal deficit. Here, we focus on urea – a major source of nitrogen – which accounts for over 70% of total subsidy. Subsidy on each ton of urea produced/imported and sold to farmers is the excess of cost of production/import and distribution over maximum retail price [MRP] controlled by government at a low level. Of the nearly 24 million tons of urea produced in India, over 80% is based on use of natural gas as feedstock/fuel. Of the total gas requirement, 2/3rd comes from domestic production and 1/3rd...
More
No comments
Soil health: change NPK balance through incentives
Delivering the 38th edition of his ‘Mann ki Baat’, Prime Minister Narendra Modi said, “Can our farmers take a pledge to bring down urea use by half by 2022? If they use less urea in agriculture, the fertility of the land will increase. The lives of farmers will start improving.” Modi made the statement in the backdrop of ‘World Soil Day’ on December 5 and the deteriorating health of soil the world over, a key factor contributing to this being the excessive use of urea. The positive correlation between excessive use of urea and the erosion in soil health is an incontrovertible fact proven by several studies and finds repeated reference in official documents, including the Economic Survey that is...
More
No comments
Correcting imbalance in fertilizer use – SHC alone won’t help
In 2015, prime minister, Modi had launched National Soil-Health-Card [NSHC] scheme with the objective of galvanizing farmers to replenish seriously degraded soils caused by excessive fertilizer use over several years. It seeks to promote a more judicious mix of fertilizers by testing soil samples of each farm household across the country on 12 parameters and prescribing recommendations on use. To test soil, the country’s cropped area is divided into grids of 10 hectares (ha) for rain-dependent farms and 2.5 ha for irrigated land. One soil sample from each grid is taken and test results are distributed to farmers whose lands fall under the relevant grid. These show which ingredients are depleted or are present in excess. Their soils need to...
More
No comments