Adequate Availabilty of Fertlizers at APT Cost Through the Year
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Year End Review 2013 |
There has been adequate availability of Chemical Fertilizers throughout the country during current year both for the Kharif and Rabi Seasons. Demands have been met through domestic production and through imports and timely supplies were made as required in all States.
Movement and Distribution of Fertilizers
The cumulative availability and Sales of Urea, DAP, MOP and NPK during the year 2013 (April’13 to November’13) in the country is as follows:
Name of Fertilizers | Availability (in LMT) | Sales (in LMT) |
Urea | 210.5 | 200.3 |
DAP | 57.4 | 49.1 |
MOP | 16.5 | 14.2 |
NPK | 53.2 | 47.4 |
Details regarding the direct transfer of subsidy are being worked out. The whole objective is to ensure the availability of fertilizers to the farmer and to effectively reach the envisaged subsidy to them.
Nutrient Based Subsidy (NBS) Policy for Phosphatic& PotassicP&K fertilizers
With a view to ensure balanced use of fertilizers and to promote investment in fertilizer sector, the Department of Fertilizers is implementing the Nutrient Based Subsidy (NBS) Policy for decontrolled Phosphatic& Potassic (P&K) Fertilizers w.e.f. 1.4.2010. Under the NBS policy, a fixed rate of subsidy (in Rs. per Kg. basis) decided on annual basis is provided to each grade of subsidized P&K fertilizers depending upon its nutrient (N, P, K & S) content. Any variant of the fertilizers under the NBS fortified with micronutrient Boron and Zinc, as provided under the FCO, is eligible for a separate additional fixed subsidy. Under the Policy the prices are allowed to be fixed by the fertilizer companies at reasonable level. In order to ascertain the reasonableness of Prices fixed by the fertilizer manufacturers/importers, they are mandatorily required to provide subsidy cost data of their fertilizers products.
At present 22 grades of P&K fertilizers, namely, DAP, MAP, TSP, MOP, Ammonium Sulphate(produced by FACT), SSP including 16 grades of complex fertilizers are covered under the NBS Policy. The subsidized fertilizers are allowed for use in manufacturing of mixture and customisedfertilizers after their receipt in the District.
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The Subsidy outgo in P&K sector during the implementation of NBS policy w.e.f. 1.4.2010 has been contained and showing decreasing trends as can be
(in Rs. Crore)
Year | Subsidy on P & K fertilizers |
2010-11 | 41500.00 |
2011-12 | 36107.94 |
2012-13 | 30576.12 |
2013-14 (BE) | 29426.88 |
With the implementation of NBS Policy, there is adequate availability of P & K fertilizers in the country and subsidy outgo in P & K sector has also been contained. Prices of P & K fertilizers remained stable during the year and were reported lower as on November 2013 as compared to prices during previous year.
New Pricing Scheme beyond Stage – III
The matter of formulation of policy for the existing urea units beyond stage-III of New Pricing Scheme (NPS) is under consideration of Group of Ministers (GOM) constituted to review the fertilizers policy, the meeting of which was held on 5th June, 2013. During the meeting, it was decided that further deliberations on the issues are required before formulation of policy for existing urea units beyond New Pricing Scheme.
At the beginning of this calendar year on 2nd January, 2013 the Department of Fertilizers had notified ‘New Investment Policy- 2012’ with an eye on future requirements and to always make adequate supplies of fertilizers in the country. It is expected that the demand of urea in the country by the end of 12th Five Year Plan will be around 360 lakh MT. With the approval of this policy, nearly 100 lakh MT of additional urea capacity is expected to be added in the country to an already existing indigenous capacity of 220 LMT and 20 LMT from Oman India Fertilizer Company (OMIFCO) in Oman. An investment of nearly Rs. 35,000 crores is proposed to be made during 12thFive Year Plan period (2012-17). This will make country self reliant in urea by end of 12th Five Year Plan. In response to the Policy, the Department of Fertilizers has received over 15 proposals from companies in the private, cooperative and public sector.
Currently consultations are on to amend the New Investment Policy (NIP)- 2012 as the response to the NIP 2012 had been more than expected.
Meanwhile the Cabinet Committee on Economic Affairs (CCEA) had also approved the proposal regarding revival of five closed units of Fertilizer Corporation of India Limited (FCIL) at Sindri, Talcher, Ramagundam, Gorakhpur and Korba. The CCEA in May 2013 approved the waiver of Government of India loan and interest thereon amounting to Rs.10, 644/- crore for the purpose. This would ensure positive net worth for FCIL and enable FCIL to come out of the purview of BIFR, and hasten the process of revival of closed units of FCIL.
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Revival of closed units of HFCL/FCIL:-
(i) There are five closed units of Fertilizer Corporation of India Ltd (FCIL) at Sindri, Talcher, Ramagundam, Gorakhpur & Korbaand three closed units of Hindustan Fertilizer Corporation Ltd. (HFCL) at Durgapur, Haldia and Barauni. The cabinet had in 2008 approved revival of FCIL and HFCL units subject to non-recourse to Government funding and to consider write off of GoI Loan and interest to the extent required. Cabinet Committee on Economic Affair (CCEA) in 2011 approved revival of Sindri, Talcher and Ramagundam Units of FCIL on ‘nomination basis’ by the nominated PSUs and Gorakhpur & Korba units of FCIL and Durgapur, Haldia, Barauniof HFCL through bidding route with the stipulation that Board for Industrial and Financial Reconstruction (BIFR) proceedings be expedited. Cabinet also approved the Draft Rehabilitation Scheme (DRS) for revival of all the Units of FCIL and HFCL. DRS envisaged revival of Talcher Unit by the consortium of M/s. Rashtriya Chemical & Fertilizers Limited (RCF), M/s Coal India Limited (CIL), and M/s Gas Authority of India Limited (GAIL), revival of Ramagundam Unit by M/s. Engineers India Limited (EIL) and M/s. National Fertilizers (NFL) Limited and revival of Sindri unit by M/s Steel Authority of India Limited (SAIL). Proposal/action plan on revival of HFCL units to be taken up once revival of FCIL units is on track.
(ii) The revival process of closed units of FCIL is on. For Talcher unit, it is proposed to establish two joint venture (JV) companies viz. first company for upstream coal gasification section, with GAIL being a major stakeholder and second company comprising RCF, CIL and FCIL for downstream section of Ammonia-urea, Nitric Acid, Ammonia Nitrate plants, off sites and utilities. The Memorandum of Understanding (MoU) among consortium PSUs, i.e. CIL, RCF, GAIL and FCIL, has been signed on 5/9/2013. For RamagundamProject, EIL & NFL are having discussions with the Technology providers and selection of the same is in the final stage. EIL itself would take up the Engineering and Project Construction for the project. For Sindriunit, it has been decided to entrust the assignment of R&R activities at Sindri Unit to M/s. Project & Development India Limited (PDIL) and PDIL have submitted their offer for assignment to SAIL on 20/09/2013 for their examination and approval, before Work Order is issued to PDIL for the R&R activities.
Disinvestment of RCF/NFL/FACT:-
As per amendment of the Securities Contract (Regulation) Rules 1957, it is mandatory for the company to dilute its shareholding to a minimum level of 10% of public equity by 8thAugust 2013. Accordingly, 7.64% GOI shareholding in NFL, 12.5% of GOI shareholding in RCF have been disinvested and 8.56% of GOI shareholding in FACT has been transferred to Special National Investment Fund to be sold over a period of five years.