1. Behind RBI’s decision to keep repo rate unchanged

Relevant for GS Prelims & Mains Paper III; Economics

With Covid pandemic impacting the near-term outlook of the economy, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Friday kept the key lending rate, or the repo rate, unchanged at 4 per cent for the sixth time in a row and slashed the growth rate to 9.5 per cent for fiscal 2021-22 after a three-day meeting.

What prompted the central bank to hold the rates?

The policy panel of the RBI said the second wave of Covid-19 has altered the near-term outlook, necessitating urgent policy interventions, active monitoring and further timely measures to prevent emergence of supply chain bottlenecks and build-up of retail margins. Policy support from all sides – fiscal, monetary and sectoral – is required to nurture recovery and expedite return to normalcy.

Accordingly, the MPC decided to retain the prevailing repo rate at 4 per cent and continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of Covid-19 on the economy, while ensuring that inflation remains within the target going forward, the panel said. The central bank also kept reverse repo rate – the RBI borrowing rate from banks — under the liquidity adjustment facility (LAF) unchanged at 3.35 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 4.25 per cent.

Why has the growth rate been slashed?

The central bank has scaled down the FY22 (2021-22) gross domestic product (GDP) growth to 9.5 per cent as against the previous projection of 10.5 per cent. Urban demand has been dented by the second wave, but adoption of new Covid-compatible occupational models by businesses for an appropriate working environment may cushion the hit to economic activity, especially in manufacturing and services sectors that are not contact intensive. On the other hand, the strengthening global recovery should support the export sector.

The panel said domestic monetary and financial conditions remain highly accommodative and supportive of economic activity. Moreover, the vaccination process is expected to gather steam in the coming months and should help to normalise economic activity quickly. Taking these factors into consideration, real GDP growth is now projected at 9.5 per cent in 2021-22, consisting of 18.5 per cent in the first quarter (Q1), 7.9 per cent in Q2, 7.2 per cent in Q3 and 6.6 per cent in Q4:2021-22

What is the RBI observation on the economy?

The central bank’s panel said the forecast of a normal south-west monsoon, the resilience of agriculture and the farm economy, the adoption of Covid compatible operational models by businesses, and the gathering momentum of global recovery are forces that can provide tailwinds to revival of domestic economic activity when the second wave abates.

On the other hand, the spread of Covid-19 infections in rural areas and the dent on urban demand pose downside risks. Ramping up the vaccination drive and bridging the gaps in healthcare infrastructure and vital medical supplies can mitigate the pandemic’s devastation. The rural demand remains strong and the expected normal monsoon bodes well for sustaining its buoyancy, going forward.

What does the RBI say about inflation?

The panel has projected the retail inflation at 5.1 per cent – within the RBI’s inflation band of plus/minus four per cent — during 2021-22. Further, it has forecast 5.2 per cent in Q1, 5.4 per cent in Q2, 4.7 per cent in Q3 and 5.3 per cent in Q4 of 2021-22 with risks broadly balanced.

According to the MPC, going forward, the inflation trajectory is likely to be shaped by uncertainties impinging on the upside and the downside. The rising trajectory of international commodity prices, especially of crude, together with logistics costs, pose upside risks to the inflation outlook. Excise duties, cess and taxes imposed by the Centre and States need to be adjusted in a coordinated manner to contain input cost pressures emanating from petrol and diesel prices. A normal south-west monsoon along with comfortable buffer stocks should help to keep cereal price pressures in check.

Further, recent supply side interventions are expected to ameliorate the tightness in the pulses market. Further supply side measures are needed to soften pressures on pulses and edible oil prices. With declining infections, restrictions and localised lockdowns across states could ease gradually and mitigate disruptions to supply chains, reducing cost pressures. Weak demand conditions may also temper the pass-through to core inflation, the MPC said.

What are the RBI’s plans on the liquidity front?

The RBI said it will continue to conduct regular operations for liquidity management. It has decided to conduct another operation under G-SAP (government securities acquisition programme) for purchase of G-Secs of Rs 40,000 crore on June 17, 2021. Of this, Rs 10,000 crore would constitute purchase of state development loans (SDLs). It has also been decided to undertake another G-SAP in Q2 of 2021-22 and conduct secondary market purchase operations of Rs 1.20 lakh crore to support the market.

During the current year so far, the Reserve Bank has undertaken regular open market operations and injected additional liquidity to the tune of Rs 36,545 crore (up to May 31) in addition to Rs 60,000 crore under the first G-SAP. A purchase and sale auction under operation twist has also been conducted on May 6, 2021 to facilitate the smooth evolution of the yield curve.

Source: The Indian Express

2. How Corbevax is different

Relevant for GS Prelims & Mains Paper III; Science & Technology

India has placed an advance order to block 300 million doses of a new Covid-19 vaccine, Corbevax, from Hyderabad-based company Biological E. What is this vaccine, and why is it important for India?

How Corbevax works

Corbevax is a “recombinant protein sub-unit” vaccine, which means it is made up of a specific part of SARS-CoV-2 — the spike protein on the virus’s surface.

The spike protein allows the virus to enter the cells in the body so that it can replicate and cause disease. However, when this protein alone is given to the body, it is not expected to be harmful as the rest of the virus is absent. The body is expected to develop an immune response against the injected spike protein. Therefore, when the real virus attempts to infect the body, it will already have an immune response ready that will make it unlikely for the person to fall severely ill.

Although this technology has been used for decades to make hepatitis B vaccines, Corbevax will be among the first Covid-19 vaccines to use this platform. Novavax has also developed a protein-based vaccine, which is still waiting for emergency use authorisation from various regulators.

How Corbevax was made

While it is indigenously produced, Corbevax’s beginnings can be traced to the Baylor College of Medicine’s National School of Tropical Medicine. The School had been working on recombinant protein vaccines for coronaviruses SARS and MERS for a decade.

“We knew all the techniques required to produce a recombinant protein (vaccine) for coronaviruses at high levels of efficiency and integrity,” said Dr Peter Hotez, Professor and Dean at the School.

When the genetic sequence for SARS-CoV-2 was made available in February 2020, researchers at the School pulled out the sequence for the gene for the spike protein, and worked on cloning and engineering it. The gene was then put into yeast, so that it could manufacture and release copies of the protein. “It’s actually similar to the production of beer. Instead of releasing alcohol, in this case, the yeast is releasing the recombinant protein,” Dr Hotez said.

After this, the protein was purified to remove any remnants of the yeast “to make it pristine”. Then, the vaccine was formulated using an adjuvant to better stimulate the immune response.

Most of these ingredients are cheap and easy to find.

In August, BCM transferred its production cell bank for this vaccine to Biological E, so that the Hyderabad-based company could take the candidate through trials. The vaccine has received approval for phase 3 trials, which the government expects will be over by July.

Biological E is also expected to scale up production for the world.

How Corbevax is different

Other Covid-19 vaccines approved so far are either mRNA vaccines (Pfizer and Moderna), viral vector vaccines (AstraZeneca-Oxford/Covishield, Johnson & Johnson and Sputnik V) or inactivated vaccines (Covaxin, Sinovac-CoronaVac and Sinopharm’s SARS-CoV-2 Vaccine–Vero Cell).

Inactivated vaccines, which include killed particles of the whole SARS-CoV-2 virus, attempt to target the entire structure of the virus. On the other hand, Corbevax, like the mRNA and viral vector Covid-19 vaccines, targets only the spike protein, but in a different way.

Viral vector and mRNA and vaccines use a code to induce our cells to make the spike proteins against which the body have to build immunity. “In this case (Corbevax), we’re actually giving the protein,” said Dr Hotez.

Like most other Covid-19 vaccines, Corbevax is administered in two doses. However, as it is made using a low-cost platform, it is also expected to be among the cheapest available in the country.

Why Corbevax matters

This is the first time the Indian government has placed an order for a vaccine that has not received emergency use authorisation, paying Rs 1,500 crore in advance to block an order that could vaccinate 15 crore Indian citizens. The Centre has provided major pre-clinical and clinical trial support towards the vaccine’s development, including a grant-in-aid of Rs 100 crore from the Department of Biotechnology.

A major reason for India placing such a big order is the difficulties it is facing in enhancing vaccine supplies. While the US, UK and the EU had made advance payments and at-risk investments into vaccines like Pfizer, AstraZeneca and Moderna, India waited until after its first two vaccines were approved before placing limited orders. Even after the government eased regulatory requirements for foreign vaccines, it did not receive a speedy response from companies like Pfizer and Moderna, their supplies already blocked through orders from other countries. India is currently in negotiations for a limited supply of Pfizer’s vaccine, and expecting to secure up to two billion doses of Covid vaccines by December this year. Given the ease with which it can be mass produced, Corbevax could make up a sizeable portion of this expected supply.

Biological E, the manufacturer of Corbevax

Biological E, headquartered in Hyderabad, was founded by Dr D V K Raju in 1953 as a biological products company that pioneered the production of heparin in India. By 1962, it forayed into the vaccines space, producing DPT vaccines on a large-scale. Today, it is among the major vaccine makers in India and, by its own claim, the “largest” tetanus vaccine producer in the world.

It has seven WHO-prequalified shots, including a five-in-one vaccine against diphtheria, tetanus, pertussis, hepatitis B and haemophilus influenza type-b infections. Its vaccines are supplied to over 100 countries and it has supplied more than two billion doses in the last 10 years alone.

Since 2013, the company has been under the management of Mahima Datla — the third generation of the founding family. During her time as managing director, the company has received WHO prequalification of its Japanese encephalitis, DTwP and Td as well as measles and rubella vaccines and also commenced commercial operations in the US.

Source: The Indian Express

3. What is the Delta variant of Covid-19, and why is it a concern?

Relevant for GS Prelims & Mains Paper III; Science & Technology

In its latest risk assessment for SARS-C0V-2 variants, Public Health England (PHE) has said a staggering 61% of the samples sequenced are now of the Delta variant (B.1.617.2). This means the Delta variant, first detected in India, is more dominant in the UK than the Alpha variant that had last year triggered a surge in the UK.

What is the Delta variant of Covid-19?

Multiple SARS-CoV-2 variants are circulating globally. One of these is the B.1.617 lineage, detected in India earlier this year. Early evidence suggests that its sub-lineage B.1.617.2, known as the Delta variant, is more transmissible than contemporary lineages.

The World Health Organizaton (WHO), which has given it the label Delta, has categorised it as a variant of concern (VOC). It has said it continues to observe “significantly increased transmissibility” and a “growing number of countries reporting outbreaks associated with this variant”.

WHO classifies a variant as a VOC when it is associated with an increase in transmissibility or detrimental change in Covid-19 epidemiology; increase in virulence; or decrease in the effectiveness of public health measures or available diagnostics, vaccines, therapeutics.

The mutations that make the variant

What makes the Delta variant a VOC?

Different variants are characterised by mutations — or alterations in the virus’s genetic material. An RNA virus, such as SARS-CoV-2, is made of about 30,000 base pairs of amino acids, placed like bricks next to each other.

An alteration in any of these base cause a mutation, effectively changing the shape and behaviour of the virus. The Delta variant contains multiple mutations in the spike protein. At least four mutations are important.

One of these is called L452R, first reported in Denmark in March last year. This mutation has been found more transmissible than wild-type strains and also been associated with reduced antibody efficacy and reduced neutralisation by vaccine sera.

The mutation P681R has been associated with chemical processes that may enhance transmissibility, PHE says.

The D614G mutation was first documented in the US early in the pandemic, having initially circulated in Europe. “There is evidence that variants with this mutation spread more quickly,” the Centers for Disease Prevention and Control (CDC) says.

Another mutation in Delta is T478K. This was present in around 65% of occurrences in variant B.1.1.222, first detected in Mexico last year and associated with higher infectivity.

What is the evidence so far on transmissibility?

Public Health England said Delta continues to demonstrate a substantially increased growth rate compared to Alpha across multiple analyses. In the week beginning May 17, PHE analysis of genome sequencing data in the UK found that 61% of cases are delta.

Delta cases are rising while Alpha cases are declining. Also, PHE said, secondary attack rates have remained higher for Delta than Alpha.

What is the evidence on severity?

PHE said early evidence from England and Scotland suggests there “may be an increased risk of hospitalisation compared to contemporaneous Alpha cases”. “A large number of cases are still within the follow-up period. In some areas, hospital admissions show early signs of increasing, but the national trend is not clear,” it said.

How effective are vaccines?

The PHE says there are analyses from England and Scotland supporting a reduction in vaccine effectiveness for Delta compared to Alpha. This is more pronounced after one dose. “Iterated analysis continues to show vaccine effectiveness against Delta is higher after 2 doses but that there is a reduction for Delta compared to Alpha,” it said.

On Friday, a paper in The Lancet said adults fully vaccinated with the Pfizer-BioNTech vaccine are likely to have more than five times lower levels of neutralising antibodies against the Delta variant than against other variants. “In the longer term, we note that both increased age and time since the second dose of BNT162b2 significantly correlate with decreased NAb activity against B.1.617.2 and B.1.351—both of which are also characteristic of the population in the UK at highest risk of severe Covid-19 ,” the study states.

Is the Delta variant associated with reinfection?

The latest analysis of 874 cases of reinfection in the UK shows that 556 were of Alpha variant, and only 96 were with the Delta variant. “During the period of time that Delta became prevalent, there has been no increase in PCR-positive participants in the… cohort overall and reinfections remain at very low numbers in individuals previously either PCR positive or seropositive,” the PHE said.

Source: The Indian Express

4. What the G7 corporate tax deal means for India

Relevant for GS Prelims & Mains Paper III; Economics

Advanced economies making up the G7 grouping have reached a “historic” deal on taxing multinational companies. Finance ministers meeting in London agreed to counter tax avoidance through measures to make companies pay in the countries where they do business. They also agreed in principle to ratify a global minimum corporate tax rate to counter the possibility of countries undercutting each other to attract investments. The deal announced Saturday involving the US, the UK, Germany, France, Canada, Italy and Japan, is likely to be put before a G20 meeting in July.

What are the decisions taken?

The first decision that has been ratified is to force multinationals to pay taxes where they operate. The second decision in the agreement commits states to a global minimum corporate tax rate of 15% to avoid countries undercutting each other. The agreement will now be discussed in detail at a meeting of G20 financial ministers and central bank governors in July.

“We commit to reaching an equitable solution on the allocation of taxing rights, with market countries awarded taxing rights on at least 20% of profit exceeding a 10% margin for the largest and most profitable multinational enterprises. We will provide for appropriate coordination between the application of the new international tax rules and the removal of all Digital Services Taxes, and other relevant similar measures, on all companies. We also commit to a global minimum tax of at least 15% on a country-by-country basis. We agree on the importance of progressing agreement in parallel on both Pillars and look forward to reaching an agreement at the July meeting of G20 Finance Ministers and Central Bank Governors,” the G7 finance ministers and central bank governors communiqué said.

Why the minimum rate?

The decision to ratify a 15% floor rate follows from a declaration of war on low-tax jurisdictions around the globe announced by US Treasury Secretary Janet Yellen, who had urged the world’s 20 advanced nations to move in the direction of adopting a minimum global corporate income tax in April. She said in a virtual speech to the Chicago Council on Global Affairs that the move to put a minimum rate in place attempted to reverse a “30-year race to the bottom” in which countries have resorted to slashing corporate tax rates to attract multinational corporations.

The US proposal had proposed a higher 21 per cent minimum corporate tax rate, coupled with cancelling exemptions on income from countries that do not legislate a minimum tax to discourage the shifting of multinational operations and profits overseas. One of the reasons the US pushed for this is purely domestic. It aims to somewhat offset any disadvantages that might arise from the Biden administration’s proposed increase in the US corporate tax rate. The proposed increase to 28% from 21% would partially reverse the previous Trump administration’s cut in tax rates on companies from 35% to 21% by way of a 2017 tax legislation. More importantly, the US proposal includes an increase to the minimum tax that was included in the Trump administration’s tax legislation, from 10.5% to 21% — the benchmark minimum corporate tax rate that Yellen has propounded for other G20 countries.

This increase comes at a time when the pandemic is costing governments across the world.

A global pact on this issue, as enunciated by Yellen, works well for the US government at this time. The same holds true for most other countries in western Europe, even as some low-tax European jurisdictions such as the Netherlands, Ireland and Luxembourg and some in the Caribbean rely largely on tax rate arbitrage to attract MNCs.

The proposal also has some degree of support from the IMF. While China is not likely to have a serious objection with the US call, an area of concern for Beijing would be the impact of such a tax stipulation on Hong Kong — the seventh-largest tax haven in the world and the largest in Asia, according to a study published earlier this year by the advocacy body Tax Justice Network. Plus, China’s frayed relationship with the US could be a deterrent in negotiations on a global tax deal.

Who are the targets?

Apart from low-tax jurisdictions, the proposal for a minimum corporate tax are tailored to address the low effective rates of tax shelled out by some of the world’s biggest corporations, including digital giants such as Apple, Alphabet and Facebook, as well as major corporations such as Nike and Starbucks. These companies typically rely on complex webs of subsidiaries to hoover profits out of major markets into low-tax countries such as Ireland or Caribbean nations such as the British Virgin Islands or the Bahamas, or to central American nations such as Panama.

The US Treasury loses nearly $50 billion a year to tax cheats, according to the Tax Justice Network report, with Germany and France also among the top losers. India’s annual tax loss due to corporate tax abuse is estimated at over $10 billion, according to the report.

What are the problems with the plan?

Apart from the challenges of getting all major nations on the same page, especially since this impinges on the right of the sovereign to decide a nation’s tax policy, the proposal has other pitfalls. A global minimum rate would essentially take away a tool that countries use to push policies that suit them. For instance, in the backdrop of the pandemic, IMF and World Bank data suggest that developing countries with less ability to offer mega stimulus packages may experience a longer economic hangover than developed nations. A lower tax rate is a tool they can use to alternatively push economic activity. Also, a global minimum tax rate will do little to tackle tax evasion.

Where does India stand?

In a bid to revive investment activity, Finance Minister Nirmala Sitharaman on September 21, 2019 announced a sharp cut in corporate taxes for domestic companies to 22% and for new domestic manufacturing companies to 15%. The Taxation Laws (Amendment) Act, 2019 resulted in the insertion of a section (115BAA) to the Income-Tax Act, 1961 to provide for the concessional tax rate of 22% for existing domestic companies subject to certain conditions including that they do not avail of any specified incentive or deductions. Also, existing domestic companies opting for the concessional taxation regime will not be required to pay any Minimum Alternate Tax.

This, along with other measures, was estimated to cost the exchequer Rs 1.45 lakh crore annually. The cuts effectively brought India’s headline corporate tax rate broadly at par with the average 23% rate in Asian countries. China and South Korea have a tax rate of 25% each, while Malaysia is at 24%, Vietnam at 20%, Thailand at 20% and Singapore at

17%. The effective tax rate, inclusive of surcharge and cess, for Indian domestic companies is around 25.17%.

“While taxation is ultimately a sovereign function, and depends upon the needs and circumstances of the nation, the government is open to participate and engage in the emerging discussions globally around the corporate tax structure. The economic division will look into the pros and cons of the new proposal as and when it comes and the government will take a view thereafter,” said a senior government official. The average corporate tax rate stands at around 29% for existing companies that are claiming some benefit or the other.

Another official said New Delhi was “proactively engaging” with foreign governments with a view to facilitating and enhancing exchange of information under Double Taxation Avoidance Agreements, Tax Information Exchange Agreements and Multilateral Conventions to plug loopholes. Besides, “effective enforcement actions” including expeditious investigation in foreign assets cases have been launched, including searches, enquiries, levy of taxes, penalties, etc and filing of prosecution complaints, wherever applicable.

To address “the challenges posed by the enterprises who conduct their business through digital means and carry out activities in the country remotely”, the government has the ‘Equalisation Levy’, introduced in 2016 following a recommendation by a panel constituted to deliberate on taxation of the digital economy. Also, the IT Act has been amended to bring in the concept of “Significant Economic Presence” for establishing “business connection” in the case of non-residents in India.

Source: The Indian Express

5. Punjab, Tamil Nadu, Kerala and Chandigarh top in Performance Grading Index

Relevant for GS Prelims & Mains Paper I; Social Issues

About Performance Grading Index

The PGI rates performance in school education based on data drawn from the Unified District Information System for Education Plus, National Achievement Survey, Mid-Day Meal, Public Financial Management System, and the Shagun portal — all maintained by the department of school education. In PGI, states are scored on a total of 1,000 points across 70 parameters, including access, infrastructure, equity and learning outcomes.

Performance of States and Union Territories

The Union Territory of Chandigarh and the states of Punjab, Tamil Nadu and Kerala have come out on top in the latest edition of the Performance Grading Index (PGI) released by the Education Ministry on Sunday. Andaman and Nicobar Islands, Arunachal Pradesh, Manipur, Puducherry, Punjab and Tamil Nadu have improved overall PGI score by 10 per cent — or 100 or more points.

Last year, the top bracket (or Grade 1++) was occupied by Chandigarh, Gujarat and Kerala. In the latest edition, Gujarat has slipped to the second bracket (Grade 1+), which is also occupied by Haryana, Maharashtra, Delhi, Rajasthan, Puducherry and Dadra and Nagar Haveli.

Thirteen states and UTs have shown improvement by 10 per cent or more in ‘Infrastructure and Facilities’, while Andaman and Nicobar Islands and Odisha have improved their scores in the domain by 20 per cent or more, the Education Ministry said. In ‘Equity’, Arunachal Pradesh, Manipur and Odisha have shown an improvement of more than 10 per cent.

In ‘Governance Process’, 19 states have shown improvement by 10 per cent or more.

Source: The Indian Express

6. What is nano urea? India’s ‘21st century’ product aiming to revolutionise world agriculture

Relevant for GS Prelims & Mains Paper III; Environment

In a development that has the potential to revolutionise the agriculture sector across the world, the Indian Farmers Fertiliser Cooperative (IFFCO) claimed Sunday it has started commercial production of ‘nano urea liquid’, a first-of-its-kind product.

The country’s largest fertiliser seller and cooperative also dispatched the product to Uttar Pradesh for use by farmers, in the first consignment from its manufacturing unit in Gujarat’s Kalol. It was developed indigenously through proprietary technology at IFFCO’s Nano Biotechnology Research Centre (NBRC) in Kalol.

This new product is expected to replace the usage of urea granules, one of the most widely used fertilisers in farmlands across the world. Conventional granular urea is one of the most important nitrogenous fertilisers in the country, with a high nitrogen content of 46 per cent, and is available at one of the lowest market prices.

Urea also forms 82 per cent of the total nitrogenous fertilisers consumed in India, with an annual consumption of 33.6 million tonnes in 2019-20.

“IFFCO Nano Urea is a product of the 21st century and it is the need of the hour to keep the environment soil, air and water, safe for future generations while securing food for all,” IFFCO vice-chairman Dilip Shangani said in a statement.

According to IFFCO, the new nano urea liquid will increase the production of crops with improved nutritional quality. Cheaper than conventional urea, the new product is also expected to reduce the environmental pollution caused by the granular form, by reducing its excessive application that exacerbates soil, water and air pollution with climate change problems.

Here’s a look at how nano urea liquid promises to radically transform farming in India and across the world by raising productivity while reducing environmental pollution and input cost.

Lower usage and cost, increased productivity

On an average, a farmer in India applies two bags of urea in one acre per crop season, with the quantity varying slightly according to the crop. According to a release from IFFCO, field trials have shown that a 500 ml bottle of nano urea can replace one bag of conventional urea as it has 40,000 ppm of nitrogen, which is equivalent nitrogen nutrient provided by one bag of conventional urea.

In field trials, it was also found that nano urea is further set to replace conventional urea as it can curtail the requirement of the same by at least 50 per cent.

Also, the costing proposition of nano urea liquid should make it more favourable over conventional urea as its 500 ml bottle will be priced at Rs 240. A 45-kg bag of conventional urea costs Rs 267.

The new product will significantly bring down the cost of logistics and warehousing, IFFCO claimed.

Apart from substantially increasing farmers’ income by cutting down on input and storage cost, nano urea liquid also aims to increase crop yield and productivity against conventional urea. It is proven to increase the crop yield by an average of 8 per cent along with improving the quality of farm produce by providing better nutrition to crops, according to the coorperative.

The productivity and efficacy trials were undertaken under the National Agriculture Research System (NARS) at 20 Indian Council of Agricultural Research (ICAR) research institutes, state agricultural universities and krishi vigyan kendras (KVKs). The trials were conducted over 11,000 farmer fields on more than 94 crops across India

Better plant nutrition, less environmental fallout

Apart from being cost-effective, nano urea liquid also promises to provide a sustainable solution for plant nutrition as despite lower usage than its current version, it provides higher nutrient efficiency for crops while reducing soil, water and air pollution.

As of now, just 30-50 per cent of nitrogen from urea is utilised by plants in farms while the rest goes waste due to quick chemical transformation because of leaching, which contaminates soil and water bodies, and volatilisation that causes emissions of nitrous oxide in the atmosphere — leading to air pollution and global warming along with low nutritional efficiency for the crop.

However, while conventional urea is effective just for 30-50 per cent in delivering nitrogen to plants, the effectiveness of the nano urea liquid is over 80 per cent.

A major reason for this increase in efficiency is because of the fact that nanotechnology, which is the base of this new form of urea, enables designing ultra-small particles that offer higher surface-mass ratios, and help in the controlled delivery of plant nutrients.

The size of one nano urea liquid particle is 30 nanometre and compared to the conventional granular urea it has about 10,000 times more surface area to volume size. Due to the ultra-small size and surface properties, the nano urea liquid gets absorbed by plants more effectively when sprayed on their leaves.

Upon penetration, these nanoparticles reach plant parts where nitrogen is required and release nutrients in a controlled manner, thereby reducing usage while also reducing wastage into the environment.

Furthermore, aside from improving yield, soil health and nutritional quality of crop, nano urea has also been tested for biosafety and toxicity according to norms followed in India and the international guidelines developed by OECD, which are adopted and accepted globally.

Besides Kalol, the nano urea liquid will be manufactured at IFFCO’s Aonla and Phulpur plants in Uttar Pradesh, the company said. In Phase I, an annual production capacity of 14 crore bottles is being installed, which would increase to additional 18 crore bottles in Phase II by 2023. These 32 crore bottles are expected to potentially replace 13.7 million tonnes of urea by 2023.

Source: The Print