Current Affairs

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Current Affairs


Date : Nov 23, 2021

Description :

Based on a News Article published in the ‘The Hindu’ on 23rd November 2021 on Page Number 7


Useful for UPSC CSE Prelims and Mains (GS Paper III)


India's Fertilizer Industry:


  • It is one of the eight primary industries.
  • In the Index of Core Industries, fertiliser has the smallest share.
  • After China, India is the world's second-largest consumer of urea fertilisers. India is also the world's second-largest producer of nitrogenous fertilisers and the third-largest producer of phosphatic fertilisers. Because we have limited potash supplies, we must rely on imports to meet our needs. Fertilizers are divided into two categories.
  • N:P:K: Nitrogenous (urea), Phosphatic (di-ammonium phosphate - DAP), and Potassic (muriate of potash (MOP) fertilisers are categorised according to the nutrients they provide to the soil.
  • Calcium, Magnesium, and Sulphur are examples of secondary fertilisers.
  • Iron, Zinc, Boron, Chloride, and other micronutrients are examples.
  • Subsidies for fertilisers (Food > Fertilizer > Petroleum > Interest payments)
  • Until 1977, no fertiliser subsidy was paid. The 1973 oil crisis resulted in a rise in fertiliser prices, which led to a drop in consumption and an increase in food prices. Manufacturers were subsidised by the government in 1977.
  • Phosphate and Potash imports were deregulated after the 1991 crisis, however Urea imports were prohibited.


Mechanism for Urea Production and Pricing:


  • Urea is a nitrogenous fertiliser material that is substantially subsidised by the Center. Today, urea is the only fertiliser that is still regulated.
  • The Urea Subsidy Scheme will be extended until 2020, according to the CCEA.
  • It is included in the Central Sector Scheme. The price of urea will remain unchanged till 2020.
  • The DBT Scheme for fertiliser subsidies to urea manufacturers and importers has now been approved. It also contains a subsidy for imported urea, which is used to close the gap between demand and domestic urea output. It also includes urea transportation freight subsidies.





  • DBT will ensure that urea makers receive their subsidies on time. Fertilizer Co., resulting in timely urea availability for farmers.
  • This will prevent fertiliser subsidy leakage and black marketing.
  • To minimise the usage of nitrogen fertilisers, a ceiling could be set.
  • Farm Gate price minus MRP paid by farmers Equals Subsidy to Fertilizer Manufacturer/Importer.
  • 2015's New Urea Policy (till 2019-20)
  • With the goal of increasing indigenous urea production, improving urea energy efficiency, and rationalising subsidy.
  • It can be used with any of the 25 current gas-powered devices.
  • It ensures that urea makers are paid on time, resulting in timely urea supply for farmers.
  • Urea is sold at a regulated price of Rs. 5360 per MT. Other costs associated with the application of the Neem coating.
  • The Center intends to loosen the grip on Urea retail pricing and make it more targeted.
  • Previously, mandatory Neem coated urea manufacture was done to inhibit nitrogen dissolution in soil, resulting in lower nutritional requirements.
  • The government is also considering setting a Nutrient Based Subsidy (NBS) cost for urea to encourage balanced fertiliser use and improve industry efficiency.
  • The CCEA has agreed to extend the Nutrient Based Subsidy scheme until 2020.


  • Under this plan, fertiliser firms (other than Urea) receive a fixed amount of annual subsidy based on the nutrient content of their products. It can be used with 22 different fertilisers (other than Urea).
  • The government sets a predetermined subsidy rate for each nutrient in subsidised nitrogen, phosphorus, potassium, and sulphur fertilisers. The MRP is determined by taking into account the international and domestic pricing of P&K fertilisers, the currency rate, and the country's inventory level.




  • Fertilizer Corporation of India Limited (FCIL) has four plants in Jharkhand: Sindri (Jharkhand), Gorakhpur (UP), Ramagundam (AP), Talcher (Odisha), and Korbe (Kerala) (Chattisgarh).
  • Hindustan Fertilizer Corporation Limited has plants in Barauni (Bihar), Durgapur (West Bengal), and Namrup (Uttar Pradesh) (Assam).
  • Trombay's Rashtriya Chemicals and Fertilizers Limited
  • Bhatinda (Punjab) and Panipat (Haryana) are home to National Fertilizers Limited (Haryana).


Government’s Initiatives in this regard:


  • The Minister of Chemicals and Fertilizers recently reviewed the Department of Fertilisers' initiatives to make India Atmanirbhar in Fertilizers.


  • To encourage the use of alternative fertilisers, the government plans to liberalise its Market Development Assistance (MDA) programme.
  • MDA Policy:


  • Previously, MDA policy was limited to solely city compost.
  • There were calls to broaden this policy to include organic waste such as biogas, green manure, rural organic compost, solid/liquid slurry, and so on.


  • The Swachh Bharat Abhiyan will be fully supported by this expansion.


  • Urea with Neem Coating:


  • The Department of Fertilizers (DoF) has mandated that all domestic producers produce 100 percent urea with Neem Coating (NCU).
  • The following are some of the advantages of using NCU: Improved soil health.
  • Use of plant protection agents is being reduced.
  • Pest and disease attacks are reduced.
  • Increased paddy, sugarcane, maize, soybean, and Tur/Red Gram yields.
  • There is very little diversion for non-agricultural reasons.
  • Nitrogen Use Efficiency (NUE) of Neem Coated Urea increases as a result of the gradual release of nitrogen, resulting in lower NCU use as compared to regular urea.


  • The New Urea Policy (NUP) for 2015 is as follows:


  • The policy's goals are to maximise indigenous urea production.
  • To improve the urea units' energy efficiency.
  • To reduce the burden of subsidies on the Indian government.



  • 2012's New Investment Policy:


  • In January 2013, the government launched the New Investment Policy (NIP)-2012, which was amended in 2014 to encourage new investment in the urea business and to make India self-sufficient in the sector.


  • Policy on City Compost Promotion:


  • The Government of India authorised a policy on city compost promotion, which was notified by the Department of Finance in 2016 and included a Market Development Assistance of Rs. 1500/- to help scale up production and consumption of city compost.


  • Compost firms eager to market municipal compost were authorised to sell city compost in bulk directly to farmers in order to improve sales volumes.
  • The Direct Benefit Transfer (DBT) for Fertilizers applies to fertiliser businesses who sell city compost.


  • Space Technology in the Fertilizer Industry:


  • In collaboration with the Geological Survey of India (GSI) and the Atomic Mineral Directorate, the Department of Finance commissioned a three-year Pilot Study on "Resource Mapping of Rock Phosphate using Reflectance Spectroscopy and Earth Observations Data" by the National Remote Sensing Centre of ISRO (AMD).


  • The NBS (Nutrient Based Subsidy) Program:


  • The Department of Finance has been implementing it since April 2010.
  • Under the NBS, each grade of subsidised Phosphatic & Potassic (P&K) fertilisers receives a defined amount of subsidy based on its nutrient content, which is determined on an annual basis.
  • Its goals include ensuring balanced fertiliser use, increasing agricultural output, fostering the expansion of the domestic fertiliser sector, and lowering the subsidy burden.


  • India's Fertilizer Consumption:


  • India's fertiliser usage in FY20 was over 61 million tonnes, with urea accounting for 55 percent of it, and is expected to rise by 5 million tonnes in FY21.
  • Because non-urea varieties (MoP, DAP, complex) are more expensive, many farmers choose to use more urea than is actually required.
  • To limit urea consumption, the government has adopted a variety of steps. To combat unlawful urea diversion for non-agricultural uses, it introduced neem-coated urea. It also increased its support for organic and low-cost farming.
  • Currently, the country produces 42-45 million tonnes of fertiliser, with imports totaling roughly 18 million tonnes.
  • Urea Subsidy: The Centre provides urea subsidy to fertiliser manufacturers based on the cost of production at each plant, with the units having to sell the fertiliser at the government-set Maximum Retail Price (MRP).
  • Non-Urea Fertilizer Subsidy: Non-urea fertiliser MRPs are deregulated or set by the firms. The Centre, on the other hand, pays a flat per-tonne subsidy to ensure that these nutrients are priced at "appropriate levels."
  • Non-urea fertilisers include Di-Ammonium Phosphate (DAP) and Muriate of Potash (MOP).
  • The Nutrient Based Subsidy Scheme regulates all non-urea based fertilisers.

Tags : Fertilizer, Indian Agriculture sector, fertilizer sucsidy

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