The crisis has therefore been caused by administrative failure and a policy void which have crippled the once thriving fertiliser sector. While administrative lapses can be blamed for not organising adequate and timely fertiliser imports, the policy vacuum is more deep-rooted, eroding the economic viability of the domestic fertiliser industry. While the demand for plant nutrients has been growing annually by a handsome 10 per cent, domestic fertiliser production has either stagnated or fallen. The ever-increasing import-dependence of a country that is the world's second largest consumer of plant nutrients has contributed, along with the spurt in feed costs, to the several-fold increase in global fertiliser prices. This has further compounded the problem for India, since the additional costs have to be met by the government through the fertiliser subsidy programme, which is in a mess because the government has massive, unpaid subsidy bills totalling a mammoth Rs 95,000 crore. This has forced a crippling liquidity crunch on the fertiliser industry, in the process affecting both production and imports. The long overdue and much-needed reforms in the domestic fertiliser sector, including a revamp of the pricing and subsidy disbursement methods, has not been forthcoming though the reports of several committees on this issue are available with the fertiliser ministry. Fresh investment in the sector has dried up and no addition to domestic capacity has taken place for nearly two decades. It is, therefore, not at all surprising that the crisis is now coming to a head, leading to law and order problems and even acquiring a political hue. On the other hand, if India responds only in a crisis, it must be hoped that the present crisis provides the spark that will light up a new set of government policies for the fertiliser sector.
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