Parliamentary Committee on Fertilizer

Context:  Recently, the Standing Committee of Parliament on Chemicals and Fertilizers headed by MP Shashi Tharoor, tabled its report in Parliament. Highlight from the Report:
  • Reducing Import: Committee called for ending the import dependency on fertilizers such as urea, diammonium phosphate (DAP), muriate of potash (MOP), nitrogen, phosphorus, and potassium (NPK).
    • Worrisome Deficit: The production of these fertilizers up to November, 2022 was 281.83 lakh metric tonnes but the consumption was 401.46 LMT.
  • Ensuring Availability: It has asked the Department of Fertilizers to ascertain the reasons for shortage of fertilizers being reported in some of the States in the country and ensure availability of fertilizers in every State by taking corrective steps.
  • Review of Nutrient-Based Subsidy (NBS) Policy: To remove the disincentives for farmers to use other fertilizers.
    • Urea is left out of the scheme and hence it remains under price control whereas technically there is no price control in other fertilizers.
    • Earlier, the Commission for Agricultural Costs and Prices, had also recommended to the government that steps should be taken to bring urea under the Nutrient-Based Subsidy (NBS) regime to address the problem of imbalanced use of nutrients.
  • Rationalizing GST: Committee has asked the Centre to lower the GST on raw materials in the interest of fertilizer manufacturing companies and farmers.
    • GST for fertilizers is at 5% and while GST on raw materials like sulphuric acid and ammonia are at 18%.
    • To include natural gas under the GST net as there are instances of double levying of VAT on natural gas.
  • Improve Supply Chain: Centre introduce purchase policy reforms and enter into long term contracts for import of various types of fertilizers and raw materials so as to offset the effects of international price rise in the short/medium term
Nutrient-Based Subsidy (NBS) Policy
  • The NBS scheme has been implemented since 2010 by the Department of Fertilizers, Ministry of Chemicals and Fertilizers.
  • Under the scheme, fertilizers are provided at subsidized rates based on the nutrients contained, namely Nitrogen (N), Phosphate (P), Potash (K) and Sulphur (S).
  • It does not include urea-based fertilizers.
 News Source: The Hindu
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