Cabinet Committee on Economic Affairs Current Affairs - 2019

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CCEA hikes ethanol procurement price for fuel blending

The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi has given its approval to increase price of ethanol procured by public sector oil marketing companies (OMCs) for one year starting December 2019. It also increased price of ethanol derived from C heavy molasses from Rs 43.46 a litre to Rs 43.75 per litre, and for B heavy molasses to Rs 54.27 per litre from Rs 52.43 earlier. It also has fixed price of ethanol from sugar, sugarcane juice, sugar syrup route at Rs 59.48 per litre. The increased prices have been approved for the forthcoming 2019-20 sugar season and will be applicable from 1 December 2019 to 30 November 2020.

Background

Union Government is implementing Ethanol Blended Petrol (EBP) Programme wherein Oil Marketing Companies (OMCs) sell petrol blended with ethanol up to 10%. This programme was extended to whole of India except UTs of Andaman Nicobar and Lakshadweep islands with effect from April 2019 to promote use of alternative and environment friendly fuels. This intervention also seeks to give boost to agriculture sector and reduce import dependence for energy requirements.

Government had notified administered price of ethanol since 2014 and since 2018 Government for first time announced differential price of ethanol based on raw material for ethanol production. These decisions have significantly improved supply of ethanol and also ethanol procurement by Public Sector OMCs has increased from 38 crore litre in ethanol supply year 2013-14 to estimated over 200 crore litre in 2018-19. Government has taken multiple steps to limit sugar production in the Country and to increase domestic production of ethanol. These steps include allowing diversion of B heavy molasses and sugarcane juice for ethanol production.

CCEA approves Nutrient Based Subsidy rates for P&K fertilizers

Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister has approved proposal for fixation of Nutrient Based Subsidy Rates for Phosphatic and Potassic (P&K) Fertilizers for the year 2019-20. This proposal was forwarded by Department of Fertilizers.

Nutrient Based Subsidy Rates 2019-20

Benefits: This will enable manufacturers and importers to formalize supply contracts for fertilizers and fertilizer inputs. It will make fertilizers available to farmers in year 2019-20.

Expenditure: The expected expenditure (during 2019-20 period) on releasing subsidy on P&K Fertilizers will be Rs. 22875.50crore.

Background: Union Government makes available Urea and 21 grades of P&K fertilizers to farmers at subsidized prices through fertilizer manufacturers/importers. This subsidy on P&K fertilizers is governed by Nutrient Based Subsidy (NBS) Scheme.

About Nutrient Based Subsidy (NBS)

Under it fixed amount of subsidy is decided by Government on annual basis and is provided on each grade of subsidized P&K fertilizers, except for Urea, based on the nutrient content present in them.

It was launched 2010. It is being implemented by Department of Fertilizers, under Ministry of Fertilizers.

Objectives: (i) Ensure sufficient quantity of P&K is available at farmer’s disposal at statutory controlled prices. (ii) Ensure balanced use of fertilizers for improving agricultural productivity, promoting growth of indigenous fertilizers industry and also reducing burden of subsidy

Features: It is largely meant for secondary nutrients like N, P, S and K and micronutrients which are very important for crop growth and development. It is implemented with expectation that it will promote balanced fertilization of soil, which will lead to increased agricultural productivity and consequently better returns to the farmers.

Significance: In India, urea is the only controlled fertilizer and is sold at statutory notified uniform sale price. NBS allows manufacturers, marketers, and importers to fix Maximum Retail Price (MRP) of Phosphatic and Potassic (P&K) fertilizers at reasonable levels. This MRP is decided considering domestic and international prices of P&K fertilizers, inventory level in the country and the exchange rates.