This is perhaps because urea is cheap; the budget subsidy on urea exceeded the estimate of Rs 6,000 crore to touch Rs 7,360 crore in 1998-99. May be subsistence farmers do not much care for balanced use of nutrients; another retardant could be inadequate irrigation. Fertiliser consumption (of NPK) is much below the level of China, despite burgeoning subsidy.

Including this year's budget provision for urea (Rs 8,000 crore which could turn to Rs 9,000 crore plus in view of larger domestic production ), the fertiliser subsidy bill could touch Rs 14,000 crore against Rs 11,000 crore last year.

An agricultural breakthrough is not in sight despite the rising fertiliser subsidy; addto this the foodgrain subsidy budgeted at Rs 8,200 crore this year, reflecting lavish support prices to the surplus grower, and the point becomes clear that neither subsidies nor price incentives are giving the desired result of assured agricultural growth of three to four per cent a year. So what is lacking? Public investment in agriculture? Inadequate availability of credit? A slowdown in the spread of new technology, a failure of extension? Policy must address these issues to give a fillip to rural growth without which industrial expansion will not be feasible.