In order to address the multiple goals of fertilizer policy, India needs to work on four key areas

GS 3: Agriculture

Context: Since 1991, when economic reforms began in India, several attempts have been made to reform the fertilizer sector to keep a check on the rising fertilizer subsidy bill, promote the efficient use of fertilizers, achieve balanced use of N, P and K (nitrogen, phosphorus and potassium), and reduce water and air pollution caused by fertilizers like urea.

The History of Increase in subsidy:

  • 1991: The prices of fertilizers were raised by 30% on average. The Economic Survey of 1991-92 noted that fertilizer prices remained almost unchanged from July 1981 to July 1991 and even with this 30% increase, fertilizer subsidy remained substantial and needed to be reduced further.
  • Due to opposition to increase fertilizer prices, the increase in the price of urea was rolled back to 17% a year later over the pre-reform price.

This creates various challenges

  • Wrong composition of fertilizer being used: The high Urea subsidy has resulted in a big shift in the composition of fertilizers used in the country in favour of urea(N). The ratio of use of N:P:K increased from 5.9:2.4:1 in 1991-92 to 9.7:2.9:1 in 1993-94 as P & K are significantly costlier. Whereas the Ideal ratio is 4:2:1.
  • Incentivizing incorrect proportion: Farmers tended to move towards balanced use, but policy and price changes reversed the favourable trend a couple of times in the last three decades.
  • Uncontrolled increase in Urea subsidies:  Over time, due to – 1) almost freezing the MRP of urea in different time periods and 2) its rising sale leading to an increase in indiscriminate and imbalanced use of fertilizers.
  • Current Cost of Fertilizer subsidy: It  has doubled in a short period of three years. For 2021-22, the Union Budget has estimated fertilizer subsidy at ₹79,530 crore (from ₹66,468 crore in 2017-18) but it is likely to reach a much higher level due to the recent upsurge in the prices of energy, the international prices of urea and other fertilizers, and India’s dependence on imports.
  • Regional Disparities: In 2019-20, fertilizer use per hectare of cultivated area varied from 70 kg of NPK in Rajasthan to 250 kg in Telangana. This gap was much wider at the district level. Further,  N,P,K ratio deviated considerably from the recommended or optimal NPK mix. It was 33.7:8.0:1 in Punjab and 1.3:0.7:1 in Kerala.
  • Inter-state disparities: due to high variations in subsidy content, which is highly biased towards urea and thus nitrogen. As a result, the magnitude of fertilizer subsidy among the major States ranges in the ratio of 8:1.
  • Serious fiscal challenges: High prices internationally also coincides with the peak demand for the Rabi season. In order to minimise the impact of rise in prices on farmers, the bulk of the price rise is absorbed by the government through enhanced fertilizer subsidy. This is likely to create serious fiscal challenges.

Impact of International Prices:

  • Import dependence for P & K: The total demand for urea in the country is about 34-35 million tonnes (mln t) whereas the domestic production is about 25 mln t. The requirement of Diammonium Phosphate (DAP) is about 12 mln t and domestic production is just 5 mln t. This leaves the gap of nearly 9-10 mln t for urea and 7 mln t for DAP, which is met through imports. The use of Muriate of Potash is about 3 mln t. This is entirely imported.
  • Price fluctuations in international market: The international prices of fertilizers are volatile and almost directly proportional to energy prices. Besides, cartels of major global producers have a strong influence on prices. The taxpayers bear 78% of the cost of urea and farmers pay only 22%. This is expected to increase and is not sustainable.

Possible reforms:

  • Demand to provide subsidies to organic fertilizers/biofertilizers: Concerned with the adverse environmental impact of certain chemical fertilizers, some sections of society suggest the use of organic fertilizers and biofertilizers instead.
  • Nutrient Based Subsidy (NBS): The government introduced the Nutrient Based Subsidy (NBS) in 2010 to address the growing imbalance in fertilizer use in many States, which is skewed towards urea (N). However, only non-nitrogenous fertilizers (P and K) moved to NBS; urea was left out.

The way forward: In order to address the multiple goals of fertilizer policy, we need to simultaneously work on four key policy areas.

  1. Selfreliance & Import substitution: In this way, we can escape the vagaries of high volatility in international prices. In this direction, five urea plants at Gorakhpur, Sindri, Barauni, Talcher and Ramagundam are being revived in the public sector.
  2. Extend the NBS model to urea and allow for price rationalisation of urea compared to non-nitrogenous fertilizers and prices of crops. The present system of keeping the price of urea fixed and absorbing all the price increases in subsidy needs to be replaced by distribution of price change over both price as well as subsidy based on some rational formula.
  1. Develop alternative sources of nutrition for plants: Discussions with farmers and consumers reveal a strong desire to shift towards the use of non-chemical fertilizers as well as a demand for bringing parity in prices and subsidy given to chemical fertilizers with organic and biofertilizers. This also provides the scope to use a large biomass of crop and enhance the value of livestock by products. This would require innovations.
  2. Improving fertilizer efficiency through need-based use rather than broadcasting fertilizer in the field. The recently developed Nano urea by IFFCO shows promising results in reducing the usage of urea. Such products need to be promoted expeditiously after testing.

Conclusion: These changes will go a long way in enhancing the productivity of agriculture, mitigating climate change, providing an alternative to chemical fertilizers and balancing the fiscal impact of fertilizer subsidy on the Union Budgets in the years to come.

JPC Bill gives much leeway to Govt. to exempt its agencies from data protection provisos

GS 3: Data security

Context: Personal Data Protection Bill (PDPB), 2019 was finally adopted by it on Monday.

  • It has been more than three years since a draft Bill on personal data protection was crafted by the Justice Srikrishna Committee of experts and submitted to the Ministry of Electronics and Information Technology in 2018.
  • Two years were passed since a Joint Parliamentary Committee was set up to scrutinise another version of the bill.
  • It was a much awaited development.

Various challenges still remain:

  • Dissent notes submitted by some panel members from the Opposition point out that it would be difficult to discuss it in the parliament.
  • Some recommendations of the Srikrishna committee ignored: The draft falls short of the standards set by the Justice Srikrishna Committee to build a legal framework based on the landmark judgment, Justice K.S. Puttaswamy vs Union of India, on privacy.

The key divergences from the Justice Srikrishna Committee’s draft Bill are-

  1. In the selection of the chairperson and members of the Data Protection Authority (DPA) which shall protect the interests of data principals and the leeway provided to the Union government to exempt its agencies from the application of the Act.
  2. No Judicial oversight: While the 2018 draft Bill allowed for judicial oversight, the 2019 Bill relies entirely on members of the executive government in the selection process for the DPA.
  3. Exemptions granted to various government institutions: In contrast to the 2018 Bill that allowed for exemptions to be granted to state institutions from acquiring informed consent from data principals or to process data in the case of matters relating only to the “security of the state”, the 2019 Bill adds “public order” as a reason to exempt an agency of the Government from the Act, besides only providing for those reasons to be recorded in writing.
  4. No Parliamentary oversight: Earlier bill also called for a law to provide for “parliamentary oversight and judicial approval of non-consensual access to personal data”.


  • Fallen short of standards: Congress’s Jairam Ramesh(JPC member), mentions in his dissent note, the “government must always comply with the Bill’s requirement of fair and reasonable processing and implementing the necessary safeguards”, which requires that the exemptions granted in writing should at least be tabled in both Houses of Parliament; but that was not accepted by the JPC.
  • Dangers of exemption on the grounds of “public order” as it is susceptible to misuse and not limited to “security of the state” which is recognised by other data regulations such as Europe’s General Data Protection Regulation as a viable reason for exemption.
  • Against Global principles: In October 2021, the Global Privacy Assembly, featuring Privacy Commissioners from over 19 countries including those from the European Union, Japan and the U.K., came up with a clear resolution on principles for government access to personal data. In its resolution, the Assembly asked for a set of principles on legal basis, the need for clear and precise rules, proportionality and transparency, data subject rights, independent oversight, and effective remedies and redress to the individuals affected.

Conclusion: It is now the task of Parliament to tighten the provisions further and bring them in conformance with the 2018 Bill.




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