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  • Reforming the fertilizer sector

    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.

    Several attempts have been made to reform the fertilizer sector to keep a check on the rising fertilizer subsidy bill.

    Background

    • After years of unchanged prices, the budget of 1991 raised the issue prices of fertilizers by 40% on average. This rise was rolled down to 30% in a few months, with exemption to small and marginal farmers from the price increase.
    • Due to opposition, the increase in Urea price was further rolled back to 17% over the pre-reform price.
    • It resulted in a big shift in the composition of fertilizers used in the country in favor of urea and thus Nitrogen (N).
    • The government started Nutrient Based Subsidy in 2010 to address the growing imbalance in fertilizer use, which was skewed towards urea (N).
    • However, only non-nitrogenous fertilizers P and K (phosphorus and potassium) were included in NBS; urea was left out.

    Need for reforms on three fronts

    Reforms are needed to promote in three key areas:

    1) The efficient use of fertilizers.

    2) To achieve balanced use of N, P, and K (nitrogen, phosphorus, and potassium).

    3) To reduce water and air pollution caused by fertilizers like urea.

    Challenges in the fertilizer sector

    A] Distortion in use due to price difference

    • The Union Budget of July 1991 raised the issue prices of fertilizers by 40% on average.
    • Due to opposition to increasing fertilizer prices, the increase in the price of urea was rolled back to 17% a year later over the pre-reform price.
    • The shift in the composition of fertilizer used: This change disturbed the relative prices of various fertilizers and resulted in a big shift in the composition of fertilizers used in the country in favor of urea and thus N.
    • Farmers tended to move towards balanced use, but policy and price changes reversed the favorable trend a couple of times in the last three decades.
    • In 2019-20, fertilizer use per hectare of cultivated area varied from 70 kg of NPK in Rajasthan to 250 kg in Telangana
    • Further, the composition of total plant nutrients in terms of the 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.

    2] Increasing fertilizer subsidy

    • Fertilizer subsidy has doubled in a short period of three years. For 2021-22, the Union Budget has estimated fertilizer subsidy at ₹79,530 crores (from ₹66,468 crores in 2017-18).
    • The subsidy 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.
    • In order to minimize the impact of rising 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.
    • At current prices, farmers pay about ₹268 per bag of urea and the Government of India pays an average subsidy of about ₹930 per bag.
    • Thus, taxpayers bear 78% of the cost of urea and farmers pay only 22%. This is expected to increase and is not sustainable.

    3] Import dependence

    • Total demand for urea: 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.
    • The international prices of fertilizers are volatile and almost directly proportional to energy prices.

    Need to shift our focus to Bio-fertilizers

    • Bio-fertilizers are cheap, renewable, and eco-friendly, with great potential to supplement plant nutrients if applied properly. However, they are not a substitute for chemical fertilizers.
    • They improve the health of the soil. Since it provides nutrients to the soil in a small and steady manner, its immediate effects are not very visible.
    • Sales of biofertilizers in the country have not picked up because of a lack of knowledge and its slow impact on the productivity of the soil.
    • The use of biofertilizers is necessary to maintain soil health as more and more use of chemical fertilizers kills all the microorganisms available in the soil, which are so essential for maintaining soil health.
    • Supplementary use of biofertilizers with chemical fertilizers can help maintain soil fertility over a long period.
    • The overall strategy for increasing crop yields and sustaining them at a high level must include an integrated approach to the management of soil nutrients, along with other complementary measures.

    Way forward

    • Self-reliance: we need to be self-reliant and not depend on the import of fertilizers.
    • 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.
    • Extend NBS model to urea: The government introduced the Nutrient Based Subsidy (NBS) in 2010 to address the growing imbalance in fertilizer use.
    • However, only non-nitrogenous fertilizers (P and K) moved to NBS; urea was left out.
    • We need to extend the NBS model to urea and allow for price rationalization of urea compared to non-nitrogenous fertilizers and prices of crops.
    • 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 large biomass of crop that goes waste and enhance the value of livestock by-products.
    • We need to scale up and improve innovations to develop alternative fertilizers.
    • Improve fertilizer efficiency:  India should pay attention to 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.

    Consider the question “What are the challenges facing the fertiliser sector in India? How subsidies lead to distortion in the use of various types of fertilisers.”

    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.

    Back2Basics: Nutrient Based Subsidy

    • Under the NBS regime – fertilizers are provided to the farmers at subsidized rates based on the nutrients (N, P, K & S) contained in these fertilizers.
    • Also, the fertilizers which are fortified with secondary and micronutrients such as molybdenum (Mo) and zinc are given additional subsidy.
    • The subsidy on Phosphatic and Potassic (P&K) fertilizers is announced by the Government on an annual basis for each nutrient on a per kg basis – which are determined taking into account the international and domestic prices of P&K fertilizers, exchange rate, inventory level in the country etc.
    • NBS policy intends to increase the consumption of P&K fertilizers so that optimum balance (N:P:K= 4:2:1) of NPK fertilization is achieved.

    [pib] Nutrient Based Subsidy (NBS) for Phosphatic & Potassic (P&K) Fertilizers

  • How to clear UPSC CSE 2022 after doubtful 2021 performance?| Fill Samanvaya for free 1-1 mentorship

    Half-way through your preparation for UPSC-CSE 2022 and feel stressed? After attending UPSC CSE 2021, do you feel the exam is highly unpredictable ? Of course, not! If you want to know what UPSC expects from its candidates every year, then continue reading. 

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    In 2020 alone, Civilsdaily helped 80+ students secure ranks in the exam. Over 25 Civilsdaily students secured ranks in the top 100. Many of these aspirants were also struggling to clear the exam in one attempt. With our guidance, they became more confident and focused to see their LSBNAA dream come true.

    Listen to all their stories and strategies on our toppers talk series, Unherd.

    Do you want to know how we planned their daily timetable till the interview stage? Fill up our mentorship form now to get a detailed 1-on-1 counselling session within the next 24 hours! We combine your hard-work with our guidance to derive the right formula for success!

    Dear Students,

    Many say that the Prelims 2021 paper was harder than Prelims 2020, a close analysis however reveals that there are more similarities than differences. Though one did not expect questions from sports this year, we all can agree that both the papers tested the application of current affairs knowledge to all the subjects.

    Trends from the last five years tell us that UPSC is keener on testing conceptual clarity of topics from the syllabus. So, it’s no longer about reading GS, Optionals and Current Affairs in isolation. If you are reading a plethora of books or watching random videos, it’s time to reconsider your way of preparation. 

    Avoid Common Preparation Mistakes Early On

    Unlike other exams, UPSC decides your fate based on what you have studied for the last 12-15 months over 1 month before the exam. Hence, rectifying preparation mistakes at the eleventh hour will not help you.

    AIR 148 UPSC 2020 topper and our Civilsdaily student Ponmani explains why answer writing with mentorship for Mains is necessary.

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    Last month we mentored around 3500 IAS aspirants, some of whom were beginners and others who had an experience of few attempts.

    We resolved common doubts related to right sources for various topics, answer writing for mains and how to crack the personality round. We found out that almost all of these aspirants struggled in one area or the other.

    If someone was excellent in scoring at prelims test series, they were not confident about mains. If someone was good at history, they were not sure about science and technology. If someone had time to revise their GS portions, they did not have time for Optionals.

    But is it wise to neglect your weak areas? Toppers manage to maintain slightly above average scores in all the subjects. 

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  • 23rd November 2021| Daily Answer Writing Enhancement(AWE)

    Topics for Today’s questions:

    GS-1     Salient features of the world’s physical georaphy

    GS-2     Bilateral, Regional and Global Groupings and Agreements involving India and/or affecting India’s interests.

    GS-3    Major Crops – Cropping Patterns in various parts of the country, – Different Types of Irrigation and Irrigation Systems; Storage, Transport and Marketing of Agricultural Produce and Issues and Related Constraints; E-technology in the aid of farmers.

    GS-4    Probity in Governance: Concept of Public Service; Philosophical Basis of Governance and Probity

    Questions:

    Question 1)

     

    Q.1 Highlighting the conditions that are conducive for the formation of Karst topography, discuss its distribution around the world. (10 Marks)

     

    Question 2)

    Q.2 Recently China tested the Hypersonic Glide Vehicle missile, which is termed as the Sputnik moment. In this context, examine its implications for the global arms race and suggest the way forward for India. (10 Marks)

    Question 3)

    Q.3 What are the issues in fertiliser sector in India? How fertiliser subsidies distorts its use? Suggest the way forward. (10 Marks)

    Question 4)  

    Q.4 Though it may seem that accountability and efficiency are antithetical to each other, accountability is a sine qua non for good governance. Discuss. (10 Marks)

     

    HOW TO ATTEMPT ANSWERS IN DAILY ANSWER WRITING ENHANCEMENT(AWE)?

    1. Daily 4 questions from General studies 1, 2, 3, and 4 will be provided to you.

    2. A Mentor’s Comment will be available for all answers. This can be used as a guidance tool but we encourage you to write original answers.

    3. You can write your answer on an A4 sheet and scan/click pictures of the same.

    4.  Upload the scanned answer in the comment section of the same question.

    5. Along with the scanned answer, please share your Razor payment ID, so that paid members are given priority.

    6. If you upload the answer on the same day like the answer of 11th  October is uploaded on 11th October then your answer will be checked within 72 hours. Also, reviews will be in the order of submission- First come first serve basis

    7. If you are writing answers late, for example, 11th October is uploaded on 13th October, then these answers will be evaluated as per the mentor’s schedule.

    8. We encourage you to write answers on the same day. However, if you are uploading an answer late then tag the mentor like @Staff so that the mentor is notified about your answer.

    *In case your answer is not reviewed, reply to your answer saying *NOT CHECKED*. 

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  • Co-op Societies are not banks, RBI cautions

    The Reserve Bank of India (RBI) has cautioned members of the public not to deal with cooperative societies undertaking banking business by adding ‘bank’ to their names.

    What is the news?

    • It has also come to the notice of RBI that some co-operative societies are accepting deposits from non-members/nominal members/ associate members.
    • This is tantamount to conducting banking business in violation of the provisions.

    Who can use ‘Bank’ title?

    • The Banking Regulation Act, 1949 was amended by the Banking Regulation (Amendment) Act, 2020, which came into force on September 29, 2020.
    • Accordingly, co-operative societies cannot use the words “bank”, “banker” or “banking” as part of their names, except as permitted under the provisions of BR Act, 1949 or by the RBI.

    What is Cooperative Banking?

    • Cooperatives are people-centred enterprises owned, controlled and run by and for their members to realise their common economic, social, and cultural needs and aspirations.
    • Cooperative bank is an institution established on the cooperative basis and dealing in ordinary banking business.
    • Like other banks, the cooperative banks are founded by collecting funds through shares, accept deposits and grant loans.
    • They are regulated by the Reserve Bank of India (RBI) and governed by the
    1. Banking Regulations Act 1949
    2. Banking Laws (Co-operative Societies) Act, 1955

    Features of Cooperative Banks

    • Cooperative banks are generally concerned with the rural credit and provide financial assistance for agricultural and rural activities.
    • Such banking in India is federal in structure. Primary credit societies are at the lowest rung.
    • Then, there are central cooperative banks at the district level and state cooperative banks at the state level.
    • Cooperative credit societies are mostly located in villages spread over the entire country.

    History of Cooperative Banking in India:

    • The cooperative movement in India was started primarily for dealing with the problem of rural credit.
    • The history of Indian cooperative banking started with the passing of Cooperative Societies Act in 1904.
    • The objective of this Act was to establish cooperative credit societies “to encourage thrift, self-help and cooperation among agriculturists, artisans and persons of limited means.”
    • Many cooperative credit societies were set up under this Act.
    • The Cooperative Societies Act, 1912 recognised the need for establishing new organisations for supervision, auditing and supply of cooperative credit.

    Structure of Cooperative Banking

    • The whole structure of cooperative credit institutions is shown in the chart given.
    • There are different types of cooperative credit institutions working in India.
    • These institutions can be classified into two broad categories- agricultural and non-agricultural.
    • Agricultural credit institutions dominate the entire cooperative credit structure.

    Various facets of cooperatives in India

    • Cooperatives in India have grown exponentially.
    • In the banking sector, according to the RBI, their contribution to rural credit increased from 3.1 percent in 1951 to an impressive 27.3 percent in 2002.

    Importance of Cooperative Banks:

    • The cooperative banking system has to play a critical role in promoting rural finance and is especially suited to Indian conditions.
    • Various advantages of cooperative credit institutions are given below:

    (1) Alternative Credit Source:  The main objective of the cooperative credit movement is to provide an effective alternative to the traditional defective credit system of the village moneylender.

    (2) Cheap Rural Credit: Cooperative credit system has cheapened the rural credit by charging comparatively low-interest rates, and has broken the money lender’s monopoly.

    (3) Productive Borrowing:  The cultivators used to borrow for consumption and other unproductive purposes. But, now, they mostly borrow for productive purposes.

    (4) Encouragement to Saving and Investment: Instead of hoarding money the rural people tend to deposit their savings in cooperative or other banking institutions.

    (5) Improvement in Farming Methods: Cooperative credit is available for purchasing improved seeds, chemical fertilizers, modern implements, etc.

    (6) Financial Inclusion: They have played a significant role in the financial inclusion of unbanked rural masses. They provide cheap credit to the masses in rural areas.

     

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  • Farm distress and the demand for guaranteed MSP

    Despite the announcement to repeal the three farm laws, farmers have decided to continue protesting for a legal mandate for Minimum Support Prices (MSP).

    What is the Minimum Support Price (MSP) system?

    • MSP is a form of market intervention by the Govt. of India to insure agricultural producers against any sharp fall in farm prices.
    • MSP is price fixed by GoI to protect the producer – farmers – against excessive falls in price during bumper production years.

    Who announces it?

    • The govt. announces MSPs for 22 mandated crops and fair and remunerative prices (FRP) for sugarcane.
    • MSP is announced at the beginning of the sowing season for certain crops on recommendations by Commission for Agricultural Costs and Prices (CACP).
    • It is announced by Cabinet Committee on Economic Affairs (CCEA) chaired by the PM of India.

    Why MSP?

    • The major objectives are to support the farmers from distress sales and to procure food grains for public distribution.
    • They are a guaranteed price for their produce from the Government.
    • In case the market price for the commodity falls below the announced MSP due to bumper production and glut in the market, government agencies purchase the entire quantity offered by the farmers at the announced MSP.

    Need for Guaranteed MSPs

    • No legal protection: While the government does announce MSPs every year, it is not required to do so by law. The compulsion to procure on MSP is political, not legal.
    • Discretion of procurement: But if there were to be a law backing the MSP regime, the government would lose its existing discretion in choosing not to procure.
    • Compulsion: A legal mandate for MSP would force the government to purchase all the products that any farmer wants to sell at the declared MSP.
    • State-wide procurement: It would also have to procure from all states, and all crops for which MSPs are announced.

    Failures of MSPs

    • A legally mandated MSP regime is likely to be neither feasible nor sustainable in the long run since Demand-side constrains are never accounted while procuring.
    • Already grain stocks lying with the government are more than twice its buffer requirement, and sometimes end up rotting.
    • At a fundamental level, the problem is there are just too many people involved in Indian agriculture for it to be truly remunerative.
    • To a great extent, the solution to the economic distress of Indian farmers lies outside agriculture — in boosting India’s industrial and services sectors.

    Possible way forward

    • It seems logical that instead of bypassing the market by using MSPs, the government should make efforts to enable farmers to participate in the market.
    • The way forward is to ramp up investment in the agriculture sector.
    • This means better irrigation facilities, easier access to credit, timely access to power, and ramping up warehouse capacity and extension services, including post-harvest marketing.
    • The approach has to be to raise the farmers’ bargaining ability and choices before them.

     

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  • Andhra Pradesh government repealed laws on 3 capitals

    The Andhra Pradesh Assembly unanimously passed a Bill to repeal two laws that were cleared last year to set up three different state capitals.

    Three Capitals Act

    • The law was titled Andhra Pradesh Decentralisation and Inclusive Development of All Regions Act, 2020.
    • The incumbent govt had decided to reverse the previous government’s decision to have an ambitious world-class capital city at Amaravati, which is located between Vijayawada and Guntur.
    • Thus, it was decided that Amaravati was to be the Legislative capital, Visakhapatnam the Executive capital, and Kurnool the Judicial capital.

    Why was it repealed?

    • Over a hundred petitions challenging the government’s move have been filed before the Andhra Pradesh High Court.
    • Farmers of Amaravati, who let the government acquire their lands, wanted them to stick to the previous plan and build a world-class capital city in the same location.

    Will Andhra Pradesh have only one capital now?

    • It is not clear if the government will stick to Amaravati as the sole capital.
    • Throughout his address, the CM stressed the need for decentralization for the equitable development of all regions.

    What are the other examples of multiple capital cities?

    • Among Indian states, Maharashtra has two capitals– Mumbai and Nagpur (which hold the winter session of the state assembly).
    • Himachal Pradesh has capitals at Shimla and Dharamshala (winter).
    • The former state of Jammu & Kashmir had Srinagar and Jammu (winter) as capitals.

    Must read

    Three capitals for Andhra Pradesh — its logic and the questions it raises

     

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  • Matosinhos Manifesto for accelerated use of space in Europe

    The European Space Agency (ESA) has approved a Matosinhos Manifesto to accelerate the use of space in Europe.

    Matosinhos Manifesto

    • At the Intermediate Ministerial Meeting that was held in Matosinhos, Portugal.
    • The Council of Ministers unanimously adopted this resolution that lays down a vision for the continent in terms of maintaining and expanding its activities in space.
    • The large-scale nature and fast pace of the climate crisis and other challenges means that no European nation will be able to effectively address them alone.

    The manifesto defines three “accelerators” to further advance Europe’s space ambitions:

    1. The first of these accelerators is for the ESA to start working towards the “Space for a Green Future”
    2. The second accelerator is called “Rapid and Resilient Crisis Response” to support governments to act decisively on crises facing Europe, from flooding and storms to wildfires
    3. The third accelerator mentioned in the resolution is “Protection of Space Assets”, whose objective is to safeguard ESA astronauts and assets from interference by space debris and space weather

    A brief history of the ESA

    • The ESA is an intergovernmental organization that was formed in 1975 with the aim of developing Europe’s space capabilities.
    • The organization has 22 member states — Austria, Belgium, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland and the UK.
    • Slovenia, Latvia and Lithuania are Associate Members.

     

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  • Global State of Democracy Report, 2021

    The number of countries moving towards authoritarianism in 2020 was higher than that of countries going in the other direction, towards democracy, a/c to the Global State of Democracy (GSD) Report, 2021.

    Note: The Global Democracy Index is released by the Economic Intelligence Unit (EIU). One may get confused over this two.

    About GSD Report

    • The GSD report is released by the International Institute for Democracy and Electoral Assistance (International-IDEA).
    • The International-IDEA, is an inter-governmental organization supporting democracy, is chaired by Australia and includes India as a member-state.
    • The report aims to influence the global debate and analyses current trends and challenges to democracy, exacerbated by the Covid-19 pandemic.
    • It offers specific policy recommendations to spark new and innovative thinking for policymakers, governments and civil society organizations supporting democracy.

    GSD framework

    Highlights of the report

    • The US and three members of the European Union (EU) [Hungary, Poland and Slovenia] have also seen concerning democratic declines.
    • The pandemic has prolonged this existing negative trend into a five-year stretch, the longest such period since the start of the third wave of democratization in the 1970s.
    • Democratically elected Governments, including established democracies, are increasingly adopting authoritarian tactics.
    • This democratic backsliding has often enjoyed significant popular support.

    India’s performance

    • The report highlighted the case of Brazil and India as “some of the most worrying examples of backsliding.
    • India is the backsliding democracy with the most democratic violations during the pandemic.
    • Violations include- Harassment, arrests and prosecution of human rights defenders, activists, journalists, students, academics and others critical of the government or its policies; internet obstructions etc.

    Resilient democracies

    • The report pointed out that many democracies had proved to be resilient to the pandemic.
    • Despite pandemic restrictions on campaigning and media, the electoral component of democracy has shown remarkable resilience.
    • Countries around the world learned to hold elections in exceedingly difficult conditions and they rapidly activated special voting arrangements to allow citizens to continue exercising their democratic rights.

    Democracy is good. I say this because other systems are worse.

    –  Jawaharlal Nehru

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  • Who was Rani Gaidinliu?

    Union Home Minister has laid the foundation for ‘Rani Gaidinliu Tribal Freedom Fighters Museum’ in Imphal, Manipur.

    Rani Gaidinliu

    • Gaidinliu (26 January 1915 – 17 February 1993) was a Naga spiritual and political leader who led a revolt against British rule in India.
    • At the age of 13, she joined the Heraka religious movement of her cousin Haipou Jadonang.
    • The movement later turned into a political movement seeking to drive out the British from Manipur and the surrounding Naga areas.
    • Within the Heraka faith, she came to be considered an incarnation of the Goddess Cherachamdinliu.

    Meeting with Pt. Nehru

    • Gaidinliu was arrested in 1932 at the age of 16, and was sentenced to life imprisonment by the British rulers.
    • Jawaharlal Nehru met her at Shillong Jail in 1937 and promised to pursue her release.
    • Nehru gave her the title of “Rani” (“Queen”), and she gained local popularity as Rani Gaidinliu.

    Her legacy

    • She was released in 1947 after India’s independence and continued to work for the upliftment of her people.
    • An advocate of the ancestral Naga religious practices, she staunchly resisted the conversion of Nagas to Christianity.
    • She was honored as a freedom fighter and was awarded a Padma Bhushan by the Government of India.

     

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  • 23rd November 2021 | Prelims Daily with Previous Year Questions

    [WpProQuiz 841]

    [WpProQuiz_toplist 841]

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