The Economic Survey has called for reduction in subsidies for fertilizers and adoption of appropriate price incentives.

The Survey said production of key fertilizers such as urea, DAP and complex fertilizers had not been satisfactory this fiscal. “The over-use of nitrogenous and limited use of P and K fertilizers is a matter of great concern, and needs appropriate price incentives by reducing fertilizer subsidies so that sustainable practises are encouraged,” it said.


It said fertilizer consumption had shown improvement as the policies for increasing availability and consumption of crop nutrients at affordable prices had been successful. Urea production is estimated at 22.38 million tonnes this fiscal against 21.98 million tonnes in 2011-12. The production of DAP and complex fertilizers is seen at 3.71 million tonnes and 7.94 million tonnes respectively in 2012-13. India produced 3.96 million tonnes and 7.70 million tonnes of DAP and complex fertilizers in the last fiscal.

It said to counter the shortfall in fertilizer production, the government was banking on its New Investment Policy (NIP) 2012. Under the NIP, the government planned to encourage investments in urea, which would increase indigenous capacity and reduce dependency on imports. “It is expected that fresh investment will come for expansion, revival, and setting up of brownfield and greenfield projects,” it said.

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