Growth & Determinants of Fertilizer Consumption in India: Application of Demand and Supply Side Models

Abstract

This paper estimated the growth of fertilizer consumption in India and forecasted it upto the year 2030 and both supply side and demand side factors which influences it. The results indicated that consumption of fertilizers had been increased at the rate of 4.16 per cent. The demand side determinants like area under irrigation reflected at the rate of 1.42 per cent growth, average minimum support prices showed a growth rate of 7 per cent and a short term institutional credit registered a growth rate of 17 per cent. Area under irrigation and sum of average MSP encourages the fertilizer consumption substantially. The supply side factors viz., production, import and subsidy were influencing the fertilizer consumption significantly. The total fertilizer demand is expected to reach at 57 million tons by 2030 and at the same time, rate of consumption might enhanced to 277 kg per hectare. It is concluded that import is unavoidable to meet the gap between domestic production and total demand.