When Piketty came to India
Thomas Piketty, the French economist and author of the famous book Capital in the Twenty First Century, was recently in India. He delivered a lecture on the state of inequality globally as well as in India.
With India heavily dependent on imported fertilisers — to the extent that 30 per cent of its urea requirement is met with imports, while other key fertilisers like Muriate of Potash (MOP), Di-ammonium Phosphate (DAP) and Nitrogen Phosphorus Potash (NPK) too are imported to the tune of 100 per cent, 60 per cent and 10 per cent, respectively — the government is keen to improve their domestic output.
However, it seems to be an uphill task though, as the production of fertilisers has only marginally increased from 434 lakh metric tonnes in 2020- 21 to 436 lakh metric tonnes in 2021-22, according to official data.
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At the same time though, all the abovementioned major fertilisers as well as Single Super Phosphate (SSP) are covered under subsidy and are heavily consumed in the country.
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According to World Bank data, the consumption of fertilisers in India is 209 kg per hectare, as against the world average of 164 kg per hectare.
In this context, the Ministry of Chemicals and Fertilisers is aiming to increase production of fertilisers in order to reduce its import dependeny.
The figures, however, tell a different story altogether.
The production of urea, DAP, MOP and NPK during 2022-23 (up to November 2022) was 187.21 LMT, 27.41 LMT, Nil and 67.21 LMT respectively. The cumulative total production of these fertilisers added up to 281.83 LMT in the period under review.
However, the consumption of urea, DAP, MOP and NPK for the same period was 232.54 LMT, 83.53 LMT, 11.23 LMT and 74.16 LMT, respectively. Therefore, cumulative total consumption of these fertilisers was 401.46 LMT.
Thus, there was a deficit of 119.63 LMT for all types of fertilisers in the country, which has also been described as “worrisome” by a Parliamentary panel.
The position in respect of urea, which is the main fertiliser in the country, is more alarming as the consumption of urea during 2022-23 (up to January 2023) was 319.03 LMT as against its production of 237.15 LMT, thus resulting in a deficit of about 81.88 LMT.
Ministry sources too have pointed out that the production capacity of urea in the country is not commensurate with its domestic demand, and the gap between demand and supply is filled through imports only.
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