Budget 2016: Proposals for Ministry of Chemicals and Fertilizers

In the Union Budget of 2016, a number of initiatives have been proposed for the Ministry of Chemicals and Fertilizers. The Union Minister of Chemicals and Fertilizers Shri Ananth Kumar outlined the initiatives:

Department of Fertilizers�

Direct Benefit Transfer (DBT)

Based on the successful experience, the government has proposed to introduce DBT on pilot basis for fertilizers in a few districts across the country, with a view to improving the quality of service delivery to farmers. 

Soil and seed testing facilities at retail outlets of Fertilizer companies

The Soil Health Card Scheme is now being implemented with greater vigour. Through this, farmers get information about nutrient level of the soil and can make judicious use of fertilizers. It has been decided that 2,000 model retail outlets of Fertilizer companies will be provided with soil and seed testing facilities during the next three years. 

City Compost

The Fertilizer companies will also co-market city compost which increases the efficacy of chemical fertilizers. A policy for conversion of city waste into compost has also been approved by the Government under the Swachh Bharat Abhiyan. 

Exemption of excise duty

Excise duty on physical mixture of fertilizers, made out of chemical fertilizers on which duty of excise has been paid, by Co-operative Societies, holding certificate of manufacture for mixture of fertilizers under the Fertilizer Control Order 1985, for supply to the members of such Co- operative Societies, is being exempted.

Concessional Basic Custom Duty (BCD)/Countervailing Duties (CVD)

Actual user condition for the imports of Phosphoric Acid and Anhydrous Ammonia at concessional Basic Custom Duty/CVD for manufacture of Fertilizers being prescribed. 

Department of Pharmaceuticals

Making quality medicines available at affordable prices has been a key challenge. We will reinvigorate the supply of generic drugs. 3,000 Stores under Prime Minister’s Jan Aushadhi Yojana will be opened during 2016-17. 

Department of Chemicals and Petrochemicals

Customs and excise duty structure plays an important role in incentivizing domestic value addition towards Make in India campaign of the Government. In line with that, the Government has proposed to make suitable changes in customs and excise duty rates on certain inputs, raw materials, intermediaries and components and certain other goods and simplify procedures, so as to reduce costs and improve competitiveness of domestic industry in sectors like chemicals & petrochemicals and many other sectors. 

Chemicals and Petrochemicals
(i)		Existing	Proposed
	BCD on all acyclic hydrocarbons and all cyclic hydrocarbons (other than paraxylene which attracts NIL BCD and styrene which attracts 2% BCD) being rationalized.	5%/2.5%	2.5%
(ii)	BCD on denatured ethyl alcohol (Ethanol) being reduced, subject to actual user conditions.	5%	2.5%
(iii)	SAD on orthoxylene, being reduced, for the manufacture of phthalic anhydride subject to actual user condition.	4%	2%
(iv)	BCD on electrolysers, Membrane and their parts required by caustic soda/potash unit using membranes cell technology being exempted.	2.5%	Nil