REPORT ON FERTILIZER AVAILABILITY (Syllabus: GS Paper 3 - Agriculture)

News-CRUX-10     10th August 2023        

Context: The Standing Committee of Parliament on Chemicals and Fertilizers in its two reports tabled, has posed questions on the availability of fertilizers and a subsidy policy. 

Highlights of the report

  • The panel has questioned the high GST rate on components of fertilizers.
  • The reports have called for ending the import dependency on fertilizers such as urea, diammonium phosphate (DAP), muriate of potash (MOP), nitrogen, phosphorus, and potassium (NPK). 
  • The production of these fertilizers up to November, 2022 was 281.83 lakh metric tonnes but the consumption was 401.46 LMT.
  • Thus, there was a deficit of 119.63 LMT for all types of fertilizers in the country, which is worrisome.
  • GST for fertilizers is at 5% and GST on raw materials like sulphuric acid and ammonia are at 18%.
  • Natural gas could be brought under the GST net as there are instances of double levying of VAT on natural gas.
  • The panel also recommended that the 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.