As a part its major policy reforms in the fertiliser sector, the Cabinet on March 10, 2016 approved the proposal for removing the minimum capacity utilisation criteria for the single super phosphate (SSP) units to be eligible for the subsidy under the Nutrient Based Subsidy (NBS) scheme with immediate effect.
SSP is a phosphatic multi-nutrient fertiliser, which contains 16 percent phosphate, 11 percent sulphur, 16 percent calcium and some other essential micro-nutrients. Because of the simple production technique, it is one of the cheapest chemical fertiliser available. It is more suited for crops like oilseeds, pulses, horticulture, vegetables, sugarcane, etc.
From October 1, 2009, it was made mandatory for the SSP units to utilise minimum 50 percent of their recognised production capacity or to produce 40,000 MT, whichever is less, per year to become eligible for subsidy. There was some capacity addition in the beginning, but for the last four years the production and consumption of SSP in the country has remained more or less stagnant.
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This new policy to remove the minimum capacity utilisation criterion would put the SSP units on the same footing as other fertilisers and they would be eligible for subsidy irrespective of quantity of SSP produced and sold for agriculture purposes.
This new policy will help revive smaller SSP units and encourage new SSP units to come up in the country to further boost indigenous production of SSP. It would also provide freedom to the SSP manufacturers to plan their production as per the market dynamics. SSP is also considered as a substitute to diammonium phosphate (DAP), which is largely import based. Growth of SSP industry will not only increase domestic production of phosphatic fertilisers in the country but also its consumption and partly act as a substitute for more costly DAP.
This would also encourage the evolution of a robust mixed fertiliser market with diversified micro-nutrients to promote balanced fertilisation of the soil. This new policy would be uniformly applicable to all fertilisers and provide a level playing field.
New SSP norms is in continuation of other policy reforms made recently which include New Urea Policy, 2015 and gas pooling for urea production. Due to the emphasis on promoting energy efficiency and rationalisation of gas pricing mechanism, highest ever urea production in the period so far has been achieved this year. It is expected that there will be an additional production of 17 lakh MT of urea this year as compared to last year. Moreover, to prevent diversion to non-agricultural use and to enhance productivity, 100 percent of urea is now neem coated.
Further, policy on promotion of city compost is a major initiative which aims at the twin objectives of making cities cleaner and utilising the city garbage as compost for improving soil health. Under this policy, for the first time market development assistance of Rs 1500 per MT will be provided to scale up production and consumption of the product.