Modi Government launches “Soil Health Card” Scheme, addresses many Challenges

In a brilliant move to address multifold problems of Indian agriculture Modi government on Thursday launched a nationwide scheme “Soil Health Card” from Suratgarh in Rajasthan. Indian agriculture has not witnessed the optimum growth potential it is capable of achieving. While the problems are many, a large part of it has to do with irrational use of fertilizers. With this well needed move the Modi government aims to cut the fertilizer subsidy bill and subsequently the fiscal deficit. 

The proposed “Soil Health Card” will entail the characteristics of soil, both Physical and Chemical. Physical characteristics include texture, compaction, color and depth.

The Soil Card Scheme proposes increasing the soil testing laboratories from about 1200 to 4700. This includes increasing mobile laboratories as well. 

Soil testing laboratories typically charge 150 rupees for basic parameters. For micro nutrients it can cost 100 rupees per parameter.

Chemical characteristics include PH value and the presence of nutrients like Nitrogen, Phosphorus, Potassium, Calcium, Iron, Zinc, Copper and Sulphur etc.

The quality and yield of the crop depends significantly on the supply of these nutrients from the soil. Irrational use of fertilizers not only impacts the crop quality and yield negatively but also increases the Fiscal deficit as Fertilizer subsidy is a big part of it. Once the farmer has beforehand information about the nature of soil, he/she can make appropriate use of fertilizers and manure. For instance, if the soil is Acidic then Lime based nutrients can be applied. Similarly for Alkaline and Saline soils gypsum based fertilizer should be applied. It will also help in decreasing the import bill on coal and other inputs like Gypsum which are imported from abroad. 

Similarly it will help the farmers make more informed and rational choices. The use of fertilizers also depends on the choice of crop. For Rice, Nitrogen based fertilizer is required more, whereas for Pulses Phosphorus is more required. Similarly for Potato, Banana and Pineapple, Potassium is indispensable. Further, this could lead to customized products tailored for specific regions in other words growing crops which are suitable for the soil and climatic conditions of the region. Punjab and Rajasthan have started facing problems because of unscientific use of fertilizers. Punjab in particular is worst hit by it leading to many health problems as well.

 As underlined by the recent Economic Survey, the ratio of fertilizer use is heavily flawed. The primary nutrients of the soil are Nitrogen, Phosphorus and Potassium and the ideal ratio of use (in general, it may vary according to locality) is 4:2:1. However the actual ratio (as per Economic Survey 2013)   8:3.2:1, in other words Urea is being used excessively, Urea is a Nitrogen based fertilizer. This also increases Coal import because Coal is used as fuel while making Urea, thereby upsetting the Current Account Deficit. Natural gas is also used in manufacture of fertilizers. Also this is subsidized by the government so the excess use of it increases the Subsidy bill of the government. Fertilizer subsidy is bigger than Fuel subsidy. 

Hence it is a very well thought about move that will not only help our farmers in achieving the maximum potential but also decrease the Fiscal Deficit and Current Account Deficit by rationalizing the use of fertilizers.

Indian agriculture still employs about 55% of our workforce. Many people still practice subsistence based agriculture, in other words they produce mostly for their own use and not much left to be sold in the market. Though Modi Government has made grand plans to make India a manufacturing hub but in this process we cannot ignore agriculture sector. Agriculture provides the raw material to be used in many other sectors like textile. 1 % growth in agriculture production leads to more growth in many other sectors. Manufacturing sector will take time to be robust enough to employ our huge workforce. Furthermore, we would always need a vibrant agriculture sector as we cannot rely on our food needs on any other country/countries.

We need to substantially increase our food production, make it diverse and also change its nature from subsistence based to commercially viable. This would need providing the farmers adequate support, which has been there but has not been rationalized. Now, with Narendra Modi’s pragmatic leadership we hope that agriculture would stop lagging and become revenue earning for the country.

As explained in the passages above, the intention of the government is to improve soil health and contain the mounting fertilizer subsidy bill, which is fully provided for and comes to 100,000 crore annually. Two third of this amount is Urea alone. 

With this decision, Modi Government has sought to address many challenges. Eyeing the Subsidy bill, the Fiscal Deficit and the Current Account Deficit as well.

The vision of Narendra Modi is commendable, it has been rationalizing the resource base of the country to remove the impediments and make the best use of available resources. 

For More such Articles on India check this link : http://thekarmayogi.com/

IMF Chief says India as the “bright spot” of the global economy

IMF, International Monetary Fund chief Christine Lagarde has lauded India as the “bright spot” of the global economy on Monday ahead of talks in New Delhi with Prime Minister Narendra Modi. She was on a two day visit to India, on course of which she met RBI chief, Finance Minister and man at the mission Narendra Modi. IMF chief went on to say that India’s economy is in right hands and appreciated Narendra Modi’s efforts to introduce the best practices followed in the world. She appreciated India and Modi for being well ahead of other countries in implementing Basel 3 norms for standardizing banking systems. 

She remarked, “Among the emerging markets India is a bright spot”. She also went on to say that India is reaping benefits of good policies and policy announcements. She was underling the growth centric policies of Modi government. She urged Modi to do more efforts to open up the economy, she said India had the “opportunity to become one of the world's most dynamic economies” with growth running at above seven per cent.

The International Monetary Fund raised its forecasts of India’s economic growth to 7.2% instead of 5.6% as predicted earlier for the current fiscal year, which runs until the end of March. It stands in testimony to Modi’s policies and leadership that growth estimates are being revised many a times within a year. OECD, the Organization for Economic Co-operation and development has also increased India’s growth estimates.

IMF chief’s observations about India

1)      Team Modi and RBI sound Macroeconomic management:  The government and RBI working together on shifting the focus to good macroeconomic management, transparent government, and inclusive development. She appreciated India’s bold step of inflation targeting.

2)       Growth centric Budget: She called Modi government’s budget growth centric. "It appears that the broad path of reform is established. Now implementation has to follow - as we know, success begets success," she said. She appreciated the budget for its focus on fiscal consolidation and focus infrasturuce development. As fiscal deficit shrinks, Indian banks could shift their focus to more lending to the private sector.

After adjusting for differences in purchasing prices between economies, India's GDP (PPP) will exceed that of Japan and Germany combined by the year 2019 if India follows on the path and implements the policy decisions. She said adding it will also exceed the combined output of the three next largest emerging market economies —- Russia, Brazil, and Indonesia.

Since formation of Modi government inflation has fallen to around five percent, subsequently the interest rates have come down leaving banks with more money to lend.  

Highlights of her observation about India’s Leadership

"My dialogue with Indian leaders has convinced me that the conditions are ripe for India to be a key engine of global growth," Lagarde said in a statement on the conclusion of her two-day visit to India.

“This is India’s moment and India should seize this moment to build a bright economic future of rapid, inclusive, and sustainable economic growth and macroeconomic stability for many years to come"

Expectations and suggestions of IMF

Lagarde lauded Modi's drive to make India a major manufacturing hub and an easier place to do business. She also urged Narendra Modi to open Indian economy more to the world. 

1.        “The economy should be opened more fully to the world, and there's a good case for removing domestic constraints on growth, especially in energy, mining and power,” she said.

2         “Further reforms of India's complex labor laws to encourage young job-seekers. Lagarde said, "Urgent remedies are needed. A good starting point is to make Indian labor markets more flexible."

3         Expressed concerns about falling female participation in workforce.

4          Expects more easing of land acquisition and other clearances, will help revive the investment cycle and achieve faster growth.  More needs to be done expediting clearances and establishing a stable regulatory regime so that the private sector can invest. These issues are on the radar of policymakers, which is promising, they must be on the action list," she said.

5         She said that further subsidy reform and implementation of the goods and services tax (GST).

Brace for future shocks from changes in US interest regime

She also said that emerging economies like India face greater risk of high market volatility and sudden outflow of capital as the United States is gears up to hike interest rates by the end of this year, which will cause flow of capital as investment in US will be more rewarding. However, she also remarked India geared to face the situation as its economy is in right hands.

Urgent remedies are needed to push growth, she said, adding that "a good starting point is to make Indian labor markets more flexible". Said the former French Foreign Minister.

 IMF chief warned of high market volatility and capital outflows when US Fed hikes rates next time and asked India and other emerging markets to be prepared for such an eventuality.

Summarizing

In light of the encouraging observations from IMF Chief and OECD, the two giants, we can be certain that our economy is being managed by the best brains aided by a visionary and decisive leadership. We have set the tone right for next 10 years, what is important now is implementation part. We are hopeful that Modi will rock that as well.