New Urea Policy 2015 - Has it Incentivised Energy Efficiency of the Domestic Urea Industry

摘要

Government of India has continued to subsidise sale of fertilizers since 1977. In the recent years, budgetary spending on fertilizer subsidy has been around 0.66 percent of GDP. Share of subsidy on urea constitutes nearly 65-70 percent of the aggregate fertilizer subsidy. Domestic urea industry is highly regulated and subject to multiple government interventions in production, pricing and imports. Government has sought to regulate subsidy on urea through periodic enunciation of pricing policies which provide firm-specific subsidy to the producers essentially on a cost-plus approach. A major objective of the latest policy- New Urea Policy 2015- is to incentivise and enhance energy efficiency of the domestic urea industry. An attempt has been made in this paper to analyse plant-wise data on energy consumption before and after introduction of the new policy intervention using appropriate statistical tests and carry out an evidence based on evaluation of the extent to which the policy has succeeded in achieving this objective.