Incentivizing Domestic Production of Fertilizers
A
study was got conducted on the impact of Nutrition Based Subsidy (NBS) Policy
by Department of Fertilizers through M/s Ernst & Young. Some of the
important findings/recommendations are as under:
(i)
Overall
subsidy burden from P&K fertilizers has declined.
(ii)
The
availability of P&K fertilizers has improved.
(iii)
There
has been significant increase in prices payable by farmers for P&K
fertilizers.
(iv)
The
consumption of DAP and MOP has declined. However, it has increased
significantly for SSP.
(v)
Significantly
low price of Nitrogen has led to increase in gap between prices of N vis-a-vis
P&K, thus resulted in the imbalanced use of Fertilizers.
(vi)
The
MRPs of P&K fertilizers must be reasonable and to secure supplies of
P&K fertilizers, strategic investment should be made by the Indian players
in mines abroad by creating ‘sovereign fund’.
Department
of Fertilizers had received twelve proposals for setting up of Revamp,
Expansion, Revival and Greenfield plants based on the New Investment Policy (NIP)
- 2012. Interest shown by the project proponents has been noted by the
Department of Fertilizers. The project proponents have been directed to
furnish the required Bank Guarantee to the Department of Fertilizers after
securing financial closure for the project but will before finalization of the
LSTK/EPCA contractor.
The
final Cabinet Committee on Economic Affairs (CCEA) Note to amend the NIP-2008
and to establish a Unified Pricing Formula in order to incentivize domestic
production of urea beyond re-assessed capacity from existing urea units which
have taken revamp under NIP-2008 has been sent to CCEA for approval.
Department
of Agriculture assesses requirement of fertilizers every cropping season and
for this purpose, organizes Zonal Conferences before every cropping season. Requirement
of fertilizers depends upon cropping pattern, cropped area, requirement of
nutrients in soil as per soil health status and recommended doses, irrigated
area, consumption pattern and accordingly States make an initial projection
based on these factors. Thereafter, requirement is finalized in Zonal Conferences
in consultation with Stakeholders namely States, Department of Fertilizers,
Lead Fertilizer Suppliers and Fertilizer Association of India (FAI) etc.
This
information was given by the Minister of State for Chemicals & Fertilizers
Shri Hansraj Gangaram Ahir in reply to an unstarred question in the Rajya Sabha
today.
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