Confederation of Indian Industry (CII) wants coordinated policy on what it calls the Indian "3Fs" challenge-fuel, fertiliser and food-stating that ignoring that these pressures are transmitted to India's economy in an integrated manner by the West Asia crisis means we are unable to grapple the situation properly.
"The 3Fs are not three disparate pressures. Fuel feeds into fertilizer, fertilizer feeds into food, and all three feed into inflation, fiscal stress, and household welfare. That is why we believe it helps to treat this as a single, integrated economic challenge so that it makes navigating external shocks that much easier," said Chandrajit Banerjee, Director General, CII.
The country is highly reliant on imports, bringing in 88% of crude oil, 90% of phosphates and 25% of urea. A considerable portion of imports also passes through the Strait of Hormuz.
Regarding fuel, CII proposes greater utilization of existing BIS standards on higher ethanol blends from E22-E30, expedite deployment of flex-fuel vehicles, establish an integrated national strategy on long-haul LNG trucking, further accelerate domestic exploration and expansion of Strategic Petroleum Reserve.
Regarding fertilisers, CII proposes a gradual shift to a Direct Benefit Transfer model of subsidy using digitised land records and soil health cards, alongside gradual assimilation of urea under the nutrient based subsidy regime. Banerjee said that the goal is not to curtail support but to enhance it.
For food, the CII mentioned that higher cost of fuel and fertilizers would ultimately translate to higher food prices and advocated timely release of onion and tomato buffer stocks held by Price Stabilisation Fund prior to August-September, a period typically considered a lean season, and crack down on hoarding.
"If we use this moment wisely we can be a much more resilient economy, stated Banerjee. "The 3Fs will stand for sustained growth today and better preparedness for the unknown tomorrow."
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