Lok Sabha Question No. 67 (STARRED), answered on 2017-02-07
Subject: Fertilizer Subsidy Bill
Ministry: CHEMICALS AND FERTILIZERS
Asked by: SRINIVAS KESINENI

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS AND FERTILIZERS

## DEPARTMENT OF FERTILIZERS

## LOK SABHA

STARRED QUESTION NO. *67

TO BE ANSWERED

ON : 07.02.2017

## Fertilizer Subsidy Bill

## *67 SHRI KESINENI NANI:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) The  total  fertilizer  subsidy  bill  for  the  current  financial  year,  State-wise including Andhra Pradesh;
- (b) The current ratio of use of NPK fertilizers in the country, State-wise;
- (c) Whether  the  Government  has  taken  steps  to  control  the  excessive  use  of NPK fertilizers in the country and if so, the details thereof;
- (d) The steps being taken by the Government to enhance domestic production of fertilizers in the country; and
- (e) Whether there are any plans to set up new fertilizer manufacturing plants or increase the capacity of any of the existing plants in the country and if so, the details thereof, State-wise including Andhra Pradesh?

## ANSWER

MINISTER OF CHEMICALS & FERTILIZERS AND PARLIAMENT AFFAIRS

(SHRI ANANTH KUMAR)

(a) to (e): A statement is laid on the Table of the House

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## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e)  OF  THE  LOK SABHA  STARRED  QUESTION  NO.  *67  TO  BE  ANSWERED  ON  07.02.2017 REGARDING FERTILIZER SUBSIDY BILL ASKED BY SHRI KESINENI NANI.

- (a) The  total  fertilizer  subsidy  budget  provided  for  the  current  financial  year 2016-17 is as under:

| Particulars                |   Amount (in crores) |
|----------------------------|----------------------|
| Indigenous Urea            |             40000    |
| Imported Urea              |             15100    |
| Indigenous P&K Fertilizers |             11985    |
| Imported P&K Fertilizers   |              6999.99 |
| City Compost               |                14.99 |
| Total                      |             74100    |

State/UT-wise figures are not available as the subsidies are being released to fertilizers companies.

- (b)  : State-wise/UT-wise NPK ratio for the year 2015-16 is enclosed at Annexure I.

(c) : The  following  measures  have  been  taken  to  avoid  excessive  use  of  NPK fertilizers in the country:-

- (i)      Government  is  advocating  soil  test  based  balanced  use  of  fertilizers  in conjunction with organic sources of plant nutrients like Farm Yard Manure  (FYM), Compost, bio-fertilizers and green manuring.
- (ii)    National  Project  on  Management  of  Soil  Health  &  Fertility  (NPMSH&F) has  been  taken  up  from  2008-09  to  promote  soil  test  based  balanced  and judicious  use  of  fertilizers  through  setting  up/  strengthening  of  soil  testing laboratory, trainings and demonstrations on balanced use of fertilizers. Now, this  scheme has been subsumed under the Soil Health Management (SHM) component of the National Mission for Sustainable Agriculture (NMSA) from 2014-15.
- (iii)     Soil  Health  Card  (SHC)  scheme  has  been  introduced  with  an  aim  to assist all State Governments  to evaluate fertility in all farm holdings across  the country and issue soil health cards to farmers regularly in a cycle of  2 years.  Soil Health Card provides information to farmers on nutrient status of their soil along with recommendations on appropriate dosage of nutrients to be applied for improving soil health & its fertility.
- (iv)     In  addition,  split  application  and  placement  of  fertilizers,  use  of  slow releasing  N-Fertilizers  and  nitrification  inhibitors,  growing  leguminous  crops

and  use  of  Resource  Conservation  Technologies  (RCTs)  are  advocated  by Indian  Council  of  Agricultural  Research  (ICAR).   The  ICAR  also  imparts training,  organizes  frontline  demonstrations  to  educate  farmers  on  these aspects.

(v)    100%  Neem  Coated  urea  production  was  made  mandatory  w.e.f 25.05.2015.    This  target  was  achieved  on  01st  September,  2015  and  1st December, 2015 for Indigenous Urea and imported urea respectively.  Urea manufacturing units are allowed to charge 5% MRP extra from the farmers for Neem Coating of Urea.

## Benefits of Neem Coated urea are as under:

1.  Increased Nitrogen Use Efficiency (NUE) by 5 to 10%.
2.  Promotes balanced use of Fertilizer.
3.  Improvement in soil health.
4.  Reduction in costs with respect to plant protection chemicals
5.  Reduction in pest and disease attack
6.  Increase of crop yield is as under:
7. (i) An increase in yield of paddy to an extent of 5.79%
8. (ii) An increase in yield of sugarcane to extent of 17.5%
9. (iii) An increase in yield of maize to the extent of 7.14 per cent
10. (iv) An increase in yield of Soybean to the extent of 7.4 per cent
11. (v) An increase in yield of Tur/Red Gram to the extent of 16.88 per cent

It is evident from above that as an average increase of yield is approx. more than 10%.

7.  Diversion of highly subsidized urea towards non-agricultural purposes is negligible among farmers after the introduction of the mandatory policy of production and distribution of only Neem coated urea

(d) : In  respect  of  Phosphatic&Potassic  sector,  the  country's  dependence  on imports is 90% and 100% respectively, either in the form of raw material or finished fertilizers.  The  Government  has been encouraging Indian Companies to establish Joint  Ventures  abroad  in  Countries  which  are  rich  in  fertilizer  resources  for production  facilities  with  buy  back  arrangements  and  to  enter  into  long  term agreement  for  supply  of  fertilizers  and  fertilizer  inputs  to  India.  In  order  to  boost indigenous  production,  the  Department  is  also  working  with  the  goal  of  having access to acquisition of the fertilizer raw materials abroad.

The Government of India has notified the New Urea Policy (NUP) - 2015 on 25th  May,  2015  for  existing  25  gas  based  urea  units  with  the  objectives  of maximizing  indigenous  urea production; promoting  energy  efficiency in urea production; and rationalizing subsidy burden on the government. NUP-2015 has led to additional production of approximately 20 LMT as compared to 2014-15, from the existing  gas  based  urea  plants  and  the  total  production  of  urea  during  the  year 2015-16 was 244.5 LMT, i.e. the highest ever urea production in the country.

(e): The Government has notified New Investment Policy - 2012 on 2nd January, 2013 and its amendment on 7th October 2014 to facilitate fresh investment in urea sector and to make India self-sufficient in the urea sector. At present, Department of Fertilizers  has  received  6  proposals  for  setting  up  of  Greenfield  and  Brownfield (Expansion) the urea projects:

| Company                                          | Projects                                                            | Ownership   | State          |
|--------------------------------------------------|---------------------------------------------------------------------|-------------|----------------|
| Indo-Gulf Fertilizers Limited -Jagdishpur        | Brownfield Expansion urea project at Jagdishpur.                    | Private     | Uttar Pradesh  |
| Chambal Fertilizers & Chemicals Limited- Gadepan | Brownfield Ammonia- Urea units at Gadepan- Kota.                    | Private     | Rajasthan      |
| Matix Fertilizers & Chemicals Limited, Panagarh  | Greenfield/Brownfield Ammonia-Urea Fertilizers Complex at Panagarh. | Private     | West Bengal    |
| Rashtriya Chemicals & Fertilizers Limited- Thal  | Brownfield Ammonia- Urea Expansion project at Thal.                 | CPSU        | Maharashtra    |
| Kanpur Fertilizers & Cement Limited              | Greenfield Project at Jabalpur                                      | Private     | Madhya Pradesh |
| Nagarjuna Fertilizers & Chemicals Ltd.           | Brownfield Project at Kakinada, Andhra Pradesh.                     | Private     | Andhra Pradesh |

Only CFCL has submitted the Bank Guarantee as per the norms of NIP - 2012. PSUs  are,  however,  exempted  from  submitting  the  Bank  Guarantee  as  per amendment to NIP - 2012.

Each  project  will  add  atleast  1.27  MMT  of  urea  to  the  total  indigenous production of the country.

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## State-wise NPK Ratio

| Major States     | 2015-16   | 2015-16   | 2015-16   | 2015-16   | 2015-16   |
|------------------|-----------|-----------|-----------|-----------|-----------|
|                  | N         | :         | P         | :         | K         |
| Andhra Pradesh   | 5.5       | :         | 2.6       | :         | 1         |
| Telanagana       | 7.9       | :         | 2.9       | :         | 1         |
| Karnataka        | 3.7       | :         | 2.0       | :         | 1         |
| Kerala           | 1.5       | :         | 0.5       | :         | 1         |
| Tamil Nadu       | 3.5       | :         | 1.4       | :         | 1         |
| Pondicherry      | 5.5       | :         | 1.1       | :         | 1         |
| WEST ZONE        |           |           |           |           |           |
| Gujarat          | 10.9      | :         | 3.1       | :         | 1         |
| Madhya Pr        | 15.0      | :         | 7.9       | :         | 1         |
| Chattisgarh      | 6.8       | :         | 3.3       | :         | 1         |
| Maharashtra      | 3.4       | :         | 1.9       | :         | 1         |
| Rajasthan        | 58.2      | :         | 24.1      | :         | 1         |
| Goa              | 2.3       | :         | 1.4       | :         | 1         |
| NORTH ZONE       |           |           |           |           |           |
| Haryana          | 52.6      | :         | 14.8      | :         | 1         |
| Punjab           | 18.6      | :         | 5.4       | :         | 1         |
| Uttar Pradesh    | 14.5      | :         | 5.4       | :         | 1         |
| Uttaranchal      | 25.4      | :         | 3.5       | :         | 1         |
| Himachal Pradesh | 3.7       | :         | 1.0       | :         | 1         |
| J & K            | 6.9       | :         | 2.3       | :         | 1         |
| EAST ZONE        |           |           |           |           |           |
| Bihar            | 11.8      | :         | 3.2       | :         | 1         |
| Jharkhand        | 22.7      | :         | 7.6       | :         | 1         |
| Orissa           | 5.6       | :         | 2.3       | :         | 1         |
| W.B              | 2.6       | :         | 1.4       | :         | 1         |
| Assam            | 4.2       | :         | 0.8       | :         | 1         |
| Tripura          | 1.5       | :         | 1.1       | :         | 1         |
| Manipur          | 5.9       | :         | 1.6       | :         | 1         |
| Meghalaya        |           |           |           |           |           |
| Nagaland         | 2.3       |           | 1.6       |           | 1         |
| Arunachal Pr.    | 4.9       |           | 0.3       |           | 1         |
| ALL INDIA        | 7.2       | :         | 2.9       | :         | 1         |

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