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ANNUAL REPORT
2011-2012
GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS
DEPARTMENT OF FERTILIZERS
CONTENTS
S.No. Subjects Page No.
1. Introduction
2. Organizational Set up and Functions
3. Development & Growth of Fertilizer Industry
4. Availability of Major Fertilizers during 2011-12
5. Plan Performance
6. Measures of Support for Fertilizers
7. Public Sector Undertakings
8. Fertilizer Education Projects
9. Information Technology (IT)
10. Vigilance Activities
11. Rights to Information Act, 2005
12. Progressive Use of Official Language (Hindi)
13. Welfare of SCs, STs, OBCs and Physically Handicapped persons
14. Woman Empowerment
15. Citizen Charter/Grievance Redressal Mechanism
16. Annexure I to XIV
1-3
4-5
6-14
15-16
17-18
19-37
38-60
61-63
64-67
68-68
69-69
70-72
73-74
75-77
78-78
79-104
Presenting the dividend cheque for the year 2010-11 to the Hon'ble Minister (Chemicals & Fertilizers)
Shri M.K. Alagiri by Dr. S.K. Das, CMD, FAGMIL. Shri Sutanu Behuria, former Secretary (Fertilizers),
Shri S C Gupta, Joint Secretary, DoF, Shri Deepak Kumar, Director (Movement), DoF are also
present along with others.
3
CHAPTER -1
1.1 INTRODUCTION
1.1.1. Agriculture which accounts for one fifth of GDP,
provides sustenance to two-thirds of our
population. Besides, it provides crucial
backward and forward linkages to the rest of the
economy. Successive five-year plan have laid
stress on self-sufficiency and self-reliance in
food grains production and concerted efforts in
this direction have resulted in substantial
increase in agriculture production and
productivity. This is clear from the fact that from
a very modest level of 52 million MT in 1951-52,
food grain production rose to about 235.88
million MT in 2010-11. In India's success
in agriculture sector, not only in terms of
meeting total requirement of food grains but
also generating exportable surpluses the
significant role played by chemical fertilizers is
well recognized and established.
1.1.2 Keeping in view the vital role played by
chemical fertilizers in the success of India's
green revolution and consequent self-reliance
in food-grain production, the Government of
India has been consistently pursuing policies
conducive to increased availability and
consumption of fertilizers in the country. As a
result, the annual consumption of fertilizers in
nutrient terms (N, P & K ), has increased from
0.7 lakh MT in 1951-52 to 281.22 lakh MT
2010-11, while per hectare consumption of
fertilizers, which was less than 1 Kg in 1951-52
has risen to the level of 144.14 Kg (estimated )
in 2010-11.
1.1.3 As of now, the country has achieved near self-
sufficiency in production capacity of urea with
the result that India could substantially manage
its requirement of nitrogenous fertilizers
through the indigenous industry. Similarly,
adequate indigenous capacity has been
developed in respect of phosphatic fertilizers to
meet domestic requirements. However the raw
materials and intermediates for the same are
largely imported. As for potash (K) since there
are no viable sources/reserves in the country,
its entire requirement is met through imports.
1.2 GROWTH OF FERTILIZER INDUSTRY
1.2.1. The industry made a very humble beginning in
1906, when the first manufacturing unit of
Single Super Phosphate (SSP) was set up in
Ranipet near Chennai with an annual capacity
of 6000 MT. The Fertilizer & Chemicals
Travancore of India Ltd. (FACT) at Cochin in
Kerala and the Fertilizers Corporation of India
(FCI) in Sindri in Bihar ( now Jharkhand) were
the first large sized -fertilizer plants set up in the
forties and fifties with a view to establish an
industrial base to achieve self-sufficiency in
food-grains. Subsequently, green revolution in
the late sixties gave an impetus to the growth of
fertilizer industry in India and the seventies and
eighties then witnessed a significant addition to
the fertilizer production capacity.
1.2.2 The installed capacity as on 31.03.2010 has
reached a level of 120.61 lakh MT of nitrogen
and 56.59 lakh MT of phosphatic nutrient,
making India the 3rd
largest fertilizer producer in
the world. The rapid build-up of fertilizer
production capacity in the country has been
achieved as a result of a favourable policy
environment facilitating large investments in the
public, co-operative and private sectors.
1.2.3 Presently, there are 30 large size fertilizer
plants in the country manufacturing urea (as on
date 29 are functioning) 21 units produce DAP
and complex fertilizers, 5 units produce low
analysis straight nitrogenous fertilizers and the
9 manufacture ammonium sulphate as by-
ANNUAL REPORT 1
product. Besides, there are about 84 medium
and small-scale units in operation producing
SSP. The sector-wise installed capacity is given
in the table below: -
SECTOR-WISE, NUTRIENT-WISE INSTALLED
CAPACITY OF FERTILIZER MANUFACTURING
UNITS AS ON 31.03.2010
Sr
No
Sector Capacity
(lakh MT)
Percentage Share
N P N P
1
2
3
Public Sector
Cooperative Sector
Private Sector
34.98
31.69
53.94
4. 33
17.13
35.13
29.0
26.27
44.73
7.65
30.27
62.08
Total: 120.61 56.59 100.00 100.00
1.3 SELF-SUFFICIENCY IN FERTILIZER SECTOR
1.3.1 Out of three main nutrients namely nitrogen,
phosphate and potash, ( N,P&K) required for
various crops, indigenous raw materials are
available mainly for nitrogenous fertilizers. The
Government's policy has hence aimed at
achieving the maximum possible degree of self-
sufficiency in the production of nitrogenous
fertilizers based on utilization of indigenous
feedstock. Prior to 1980, nitrogenous fertilizer
plants were mainly based on naphtha as
feedstock. A number of fuel oil/LSHS based
ammonia-urea plants were also set up during
1978 to 1982. In 1980, two coal-based plants
were set up for the first time in the country at
Talcher, (Orissa) and Ramagundam, (Andhra
Pradesh). These coal based plants have,
however, been closed by Government w.e.f.
1.4.2002 due to technical and financial non-
viability. However, with natural gas becoming
available from offshore Bombay High and South
Basin, a number of gas based ammonia-urea
plants have been set up since 1985. As the
usage of gas increased and its available supply
dwindled, a number of expansion projects came
up in the last few years with duel feed facility
using both naphtha and gas. Feasibility of
making available Liquefied Natural Gas (LNG)
to meet the demand of existing fertilizer plant
and/or for their expansion projects along with
the possibility for utilising newly discovered gas
reserves, is also being explored by various
fertilizer companies in India.
1.3.2. In case of phosphates, the paucity of domestic
raw material has been a constraint in the
attainment of self-sufficiency in the country.
Indigenous rock phosphate supplies meet only
5-10% of the total requirement of P2O5. A policy
has therefore been adopted which involves mix
of three options, viz, domestic production based
on indigenous/imported rock phosphate,
imported sulphur and ammonia; domestic
production based on indigenous / imported
intermediates, viz. ammonia and phosphoric
acid; and third, import of finished fertilizers.
During 2010-11 roughly 70% of the requirement
of phosphatic fertilizers was met through the
first two options.
1.3.3. In the absence of commercially exploitable
potash sources in the country, the entire
demand of potassic fertilizers for direct
application as well as for production of complex
fertilizers is met through imports.
1.3.4. Given the volatility in international market for
fertilizer in general and urea market in
particular, marginal provision through imports
could be used to the country's strategic
advantage. This is also desirable as the
international market, especially in case of urea,
is very sensitive to demand supply scenario.
Under the new pricing regime for urea units
applicable from 01.04.2003, for securing
additional indigenous supply of urea,
economically efficient units are being permitted
to produce beyond their re-assessed capacity
to substitute/ minimize imports.
1.4 FERTILIZER SUBSIDY
1.4.1. The subsidy on fertilizers is passed on to the
farmers in the form of subsidized MRPs. The
selling prices as notified by Government for the
subsidized fertilizers are much lower than the
normative delivered cost of these fertilizers at
farm gate level. The difference between the
2 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
normative delivered cost at farm gate level and
the notified selling prices is paid as subsidy to
manufacturers/importers on sale of fertilizers to
the farmers at the subsidized prices.
1.4.2 The increase in rate of subsidy on fertilizers
combined with increase in consumption of
fertilizes has led to a substantial increase in
requirement of subsidy. In spite of increase in
cost of fertilizes, the Government has
completely kept the farmers insulated from this
increase in cost and have increased the subsidy
allocations to meet the consumption needs of
the farmers at subsidized level of prices. The
subsidy on fertilizers has been increased
sharply over the last few years. The details of
fertilizer subsidy over the last few years are as
below:-
sulphur, ammonia, phosphoric acid, electricity,
etc., as also the cost of transportation, went up
significantly during the eighties. The gas-based
fertilizer units commissioned during this period
also involved higher capital investment per
tonne of installed capacity, necessitating
constant upward revision in the retention prices.
The selling prices of fertilizers to the farmers,
however, remained almost at the same level
between July, 1981 and July 1991. The
Government effected an increase of 30% in the
issue prices of fertilizers in August, 1991 after a
gap of a decade. The selling price of urea,
which was reduced by 10% in August 1992, was
revised upwards by 20% in June 1994 followed
by another increase by 10% with effect from
21.2.97. The prices of urea were again revised
in February 2002 by 5% and by Rs. 240 PMT of
DETAILS OF EXPENDITURE ON SUBSIDY/CONCESSION
Period Amount of concession disbursed on Decontrolled Fertilizers
(Indigenous + imported)
Amount of Subsidy
disbursed on Urea
Total for all fertilizers
Indigenous
P&K
Imported
1P&K
Total
(P&K)
Indigenous
Urea
Imported
Urea
Total
(Urea)
2007-08 10333.80 6600.00 16933.80 16450.37 9934.99 26385.36 43319.16
2008-09 32957.10 32597.69 65554.79 20968.74 12971.18 33939.92 99494.71
2009-10 16000.00 23452.06 39452.06 17580.25 6999.98 24580.23 64032.29
2010-11 20650.00 20850.00 41500.00 15080.73 9255.95 24336.68 65836.68
2011-12 (RE)
19832.00 14954.87 34786.87 19308.00 17475.00 36783.00 71569.87
2012-13 (BE)
16000.01 12576.11 28576.12 19000.01 18016.00 37016.01 65592.13
1.4.3 The steady increase in fertilizer subsidies over urea w.e.f. 28.2.2003. The price increase made
the years has largely been the result of effective from 28.2.2003 was, however, later
increasing production / consumption and withdrawn w.e.f. 12.3.2003. The MRP of urea i.
increases in the costs of inputs of indigenous e. Rs. 4830 per tonne exclusive of local levies
fertilizers and prices of imported fertilizers from continued upto 31-03-2010. With effect from 1-
time to time. The cost of various inputs / utilities, 04-2010, MRP of urea increased by 10% i. e.
such as coal, gas, naphtha, rock phosphate, from Rs. 4830 per MT to Rs. 5310 per MT.
*****
ANNUAL REPORT 3
CHAPTER -2
4 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
*****
ANNUAL REPORT 5
Year of Comm.
Unit Feedstock and Sector
Installed Capacity (lakh/MT)
1967 GSFC-Baroda Gas-Private 3.706 1969 SFC-Kota Naphtha-Private 3.790 1970 DIL-Kanpur Naphtha-Private 7.220 1971 MFL-Madras Naphtha-Public 4.868 @ 1973 ZIL -Goa Naphtha-Private 3.993 1975 SPIC-Tuticorin Naphtha-Private 6.200 1976 MCFL-Mangalore Naphtha-Private 3.800 1978 NFL-Nangal FO/LSHS-Public 4.785 1978 IFFCO-Kalol Gas-Coop. 5.445 @ 1979 NFL-Bhatinda FO/LSHS-Public 5.115 1979 NFL-Panipat FO/LSHS-Public 5.115 1981 IFFCO-Phulpur Gas--Coop. 5.511 1982 RCF-Trombay-V Gas-Public 3.30 1982 GNFC-Bharuch FO/LSHS-Private 6.360 1985 RCF-Thal Gas-Public 17.068 1986 KRIBHCO-Hazira Gas-Coop. 17.292 1987 BVFCL-Namrup-III
(Formerly HFC) Gas-Public 3.150
1988 NFL-Vijaipur Gas-Public 8.646 1988 IFFCO-Aonla Gas-Coop. 8.646 1988 Indogulf-Jagdishpur Gas-Private 8.646 1992 NFCL-Kakinada Gas-Private 5.970 1993 CFCL-Gadepan Gas-Private 8.646 1994 TCL-Babrala Gas-Private 8.646 1995 KRIBHCO SHYAM -
Shahja- hanpur (Formerly OCFL)
Gas-Private 8.646
1996 IFFCO-Aonla expansion
Gas-Cooperative 8.646
1997 NFL-Vijaipur expansion
Gas-Public 8.646
1997 IFFCO-Phulpur expansion
Gas--Cooperative 8.646
1998 NFCL-Kakinada expansion
Naphtha-Private 5.970
1999 CFCL-Gadepan expansion
Naphtha/Gas- Private
8.646
2005 BVFCL:Namrup-II Gas-Public 2.400 @
3.1 D E V E L O P M E N T A N D G R O W T H O F FERTILIZER INDUSTRY
3.1.1 CAPACITY BUILD-UP
At present, there are 30 large size fertilizer
plants in the country manufacturing urea (as on
date 29 are functioning) 21 units produce DAP
and complex fertilizers, 5 units produce low
analysis straight nitrogenous fertilizers and the
9 manufacture ammonium sulphate as by-
product. Besides, there are about 84 medium
and small-scale units in operation producing
SSP. The total installed capacity of fertilizer
production which was 119.60 lakh MT of
nitrogen and 53.60 lakh MT of phosphate as on
31.03.2004 has marginally increased to120.61
lakh MT of nitrogen and 56.59 lakh MT of
phosphate as on 01.04.2010.
3.2 PRODUCTION CAPACITY AND CAPACITY
UTILISATION
3.2.1. The production of fertilizers during 2010-11
was 121.56 lakh MT of nitrogen and 42.22 lakh
MT of phosphate. The production target for
2011-12 was 127.56 Lakh MT of nitrogen and
49.24 Lakh MT of Phosphate, representing a
growth rate of 4.9% in nitrogen and 13.9% in
Phosphate as compared to production in 2010-
11. Production target for nitrogenous fertilizer is
more than the installed capacity. The production
target for phospahtic fertilizer is less than
installed capacity due to constraints in
availability of raw materials/ intermediates
which are substantially imported. However,
taken together, the production of 'N' and 'P'
during the year is very nearer to the
corresponding period of last year
3.2.2. The production performance of both
nitrogenous and phosphatic fertilizers during
the year 2010-11 was satisfactory. Production of
nitrogenous fertilizers was less than target by
2.97 Lakh MT, as there was no production by
SPIC. The production of phosphatic fertilizers
was more than target by 6.22 Lakh MT.
3.2.3. The installed capacity of urea units in the country is as follows:-
UREA UNITS SET UP BETWEEN 1967-2005 WITH
REASSESSED CAPACITY
Note: @ After revamp
6 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
3.2.4 The following 9 urea plants of the companies
are presently closed/under shutdown due to
various reasons, inter-alia, on account of
t e c h n o l o g i c a l o b s o l e s c e n c e , f e e d s t o c k
limitation, non-viability of unit/company and
heavy financial losses.
Sl.
No. Name of the
Company/Unit Date of
closures Annual
Installed
Capacity
(In Lakh MT) 1. FCI: Gorakhpur 10.6.1990 2.85 2. FCI: Ramagundam 1.4.1999 4.95 3. FCI: Talcher 1.4.1999 4.95 4. FCI: Sindri 16.3.2002 3.30 5. HFC: Durgapur 1.7.1997 3.30 6. HFC: Barauni 1.1.1999 3.30 7. RCF: Trombay-I 1.5.1995 0.98 8. NLC: Neyveli 31.3.2002 1.53 9. FACT: Cochin-I 15.5.2001 3.30
Total 28.46
Note: Production by DIL-Kanpur (7.22 LMT) was suspended due
to financial constraints.
· E x p a n s i o n a n d c a p a c i t y a d d i t i o n /
e f f i c i e n c y e n h a n c e m e n t t h r o u g h
retrofitting / revamping of existing
fertilizer plants.
· Setting up joint venture projects in
countries having abundant and cheaper
raw material resources.
· Working out the possibility of using
alternative sources like liquefied natural
gas, coal gasification, etc., to overcome
t h e c o n s t r a i n t s i n t h e d o m e s t i c
a v a i l a b i l i t y o f c h e a p a n d c l e a n
feedstock, particularly for the production
of urea.
· Looking at possibilities of revival of
some of the closed units by setting up
brownfield units subject to availability of
gas.
3.2.5. The domestic fertilizer industry has by and
large attained the levels of capacity utilisation
comparable with others in the world. The
capacity utilisation during 2010-11 was 100.9%
for nitrogen and 75% for phosphate. The
estimated capacity utilisation during 2011-12 is
104.4% of nitrogen and 78.7% of phosphate.
Within this gross capacity utilization, the
capacity utilisation in terms of the urea plants
was 109.2% in 2010-11 and 107.4% in 2011-12.
As for phosphate fertilizers, apart from the
constraints mentioned earlier, the actual
production capacity utilisation has also been
influenced by the demand trends.
3.2.6. The capacity utilisation of the fertilizer industry,
particularly in respect of urea, is expected to
i m p r o v e f u r t h e r t h r o u g h r e v a m p i n g /
modernisation of the existing plants..
3.2.7 The unit-wise details of installed capacity,
production and capacity utilisation during 2010-
11 and 2011-12 are given in Annexure-IV.
3.3 STRATEGY FOR GROWTH
3.3.1 The following strategy has been adopted to
increase fertilizer production:
3.4 FEED STOCK POLICY
3.4.1 At present, natural gas based plants account for
more than 66% of urea capacity, naphtha is
used for less than 30% urea production and the
balance capacity is based on fuel oil and LSHS
as feedstock. The two coal based plants at
Ramagundam and Talcher were closed down
due to technological obsolescence and non-
viability.
3.4.2 Natural gas has been the preferred feedstock
for the manufacture of urea over other
feedstocks viz. naphtha and FO/LSHS, firstly,
because it is clean and efficient source of
energy and secondly, it is considerably cheaper
a n d m o r e c o s t e ff e c t i v e i n t e r m s o f
manufacturing cost of urea which also has a
direct impact on the quantum of subsidy on
urea.
3.4.3 Accordingly, the pricing policy, announced in
January 2004, provides that new urea projects,
expansion of existing urea units and capacity
i n c r e a s e t h r o u g h d e - b o t t l e n e c k i n g /
r e v a m p / m o d e r n i z a t i o n w i l l b e a l s o
allowed/recognized if the production comes
ANNUAL REPORT 7
from using natural gas/LNG as feedstock.
For the same reasons, a policy for conversion
of the existing naphtha/FO/LSHS based urea
units to natural gas/LNG as feedstock has
also been formulated in January 2004, which
encourages early conversion to natural
gas/LNG. Pursuant to formulation of policy
for conversion of non-gas urea units to gas,
three naphtha based plants namely, Chambal
Fertilizers & Chemicals Limited (CFCL),
Gadepan-II and IFFCO-Phulpur-I & II have
already converted to NG/LNG. Shriram
Fertilizers & Chemicals Limited (SFC-Kota)
has also started using gas w.e.f. 22nd
September 2007.
3.5 REQUIREMENT AND AVAILABILITY OF
GAS TO FERTILIZER SECTOR
3.5.1 Allocation of Natural Gas for FY 2011-12
Ministry of Petroleum & Natural Gas on 30th
September 2011 has allocated 3.021
mmscmd of gas as against the demand of
3.732 mmscmd of gas during the current year
2011-12, from the additional gas available
from ONGC's nominated blocks. However,
no allocation has been made to IFFCO-
Phulpur (0.3 mmscmd) and IGFL-Jagdishpur
(0.338 mmscmd). Department of Fertilizers
has therefore requested Ministry of Petroleum
& Natural Gas (MoPNG) to include the above
demand. In addition DOF has also requested
MoPNG for meeting the requirement of 1.28
mmscmd of gas by the ZIL, Goa who will
complete the pipeline connectivity by the first
week of Feb 2012 and the requirement of 0.10
mmscmd of NFCL-Kakinada because of lean
gas supply to the unit.
3.6. ALLOCATION OF NATURAL GAS FOR FY
2012-13 ONWARDS
3.6.1 DOF has already communicated year-wise
requirement of Natural Gas to Ministry of
Petroleum & Natural Gas (MoPNG). DOF has
requested MoP&NG that a minimum firm
allocation of 24.2 mmscmd gas is required to
be allocated by MOPNG for setting up of
seven expansion units, two Greenfield units
and revival of at least two closed urea units of
FCIL/HFCL on gas, so that the country can
become self sufficient in Urea production in
next three to four years. Further, a firm
allocation of 3.75 mmscmd of gas by MOPNG
should be made for FO/LSHS based urea
units converting to gas and 8.52 mmscmd of
gas for conversion of naphtha based units.
3.6.2 Allocation and pricing of CBM – MOPNG has
been requested to take immediate action for
allocation of the required CBM to the urea unit
being setup by MATIX at Burdwan. MOPNG
has also been requested for deciding the price
of CBM as soon as possible, since the unit is
under construction and any delay in allocation
of CBM and discovery of its price may impact
the viability and production from the said urea
unit.
3.6.3 Gas pipeline connectivity - Connectivity to all
FO/LSHS and Naphtha based urea units
converting to gas, revival of closed urea units
of FCIL and HFCL and proposed Greenfield
units need to be provided on priority basis.
The required pipeline connectivity through
various pipelines for the aforesaid urea units
is indicated below:
· The units of NFL at Bhatinda, Nangal (Punjab)
and Panipat (Haryana) are to be connected by
Dadri-Bawana-Nangal pipeline.
· Indian Farmers Fertilizers Cooperative Ltd
(IFFCO), Phulpur and Indo-Gulf Fertilizers
Limited (IGFL), Jagdishpur were allocated only
half of their additional requirement of gas from
KG-D6 due to capacity constraint in the
pipeline. MoPNG indicated that the remaining
gas will be supplied after the enhancement of
pipeline capacity by 2011-12.
· Connectivity to DIL-Kanpur can be through
adjacent pipeline network.
· Construction of Jagdishpur-Haldia pipeline
may be expedited for providing gas to units in
eastern sector (Halida, Baruni, Gorakhpur,
Durgapur, Burdwar, Kanpur).
8 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
S.No. Name of Unit Status of pipeline connectivity
1 HFCL/ FCIL a Durgapur Proposed to be
connected to GAIL‟s proposed Haldia- Jagdishpur pipeline authorized by GoI but the laying of the pipeline is being firmed up based on confirmation regarding schedule for revival of the plant.
b Barauni Proposed to be connected to GAIL‟s proposed Haldia- Jadishpur pipeline authorized by GoI but the laying of the pipeline is being firmed up based on confirmation regarding schedule for revival of the plant.
c Ramagundam No plans to connect this unit to any GAIL‟s upcoming pipeline but may be connected to Mallavaram-Bhilwara pipeline for which bids have been submitted to PNGRB
d Gorakhpur Proposed to be connected to GAIL‟s proposed Haldia- Jadishpur pipeline authorized by GoI but the laying of the pipeline is being firmed up based on confirmation regarding schedule for revival of the plant.
e Haldia Proposed to be connected to GAIL‟s proposed Haldia- Jadishpur pipeline authorized by GoI but the laying of the pipeline is being firmed up based on confirmation regarding schedule for revival of the plant.
· New pipeline to connect the closed units of
HFCL-Durgapur, HFCL-Barauni, HFCL-Haldia,
FCIL-Sindri & FCIL-Gorakhpur should be
targeted for completion by 2013-14.
· Early gas connectivity to naphtha units viz MFL-
Chennai, ZIL-Goa, MCFL-New Mangalore and
SPIC-Tuticorin will lead to a substantial subsidy
savings.
Revival
3.6.4 Status of Pipeline connectivity for Fertilizer Plants.
Expansion
S.No. Name of Unit Status of pipeline connectivity
1 KRIBHCO-
Hazira(Gujarat) The plant has been connected through
newly laid DUPL connectivity wherein capacity exists.
2 RCF- Thal(Maharashtra)
Presently capacity does not exist in DULP pipeline but the same is planned to augmented.
3 Chambal Gadepan(Kota) Rajasthan
Presently limited
capacity exists in Kota- Vijaipur segment, however, the same is planned to be augmented
4 TCL-Babrala Presently capacity of HVJ/DVPL has been
augmented but in the downstream segment there is capacity constraint in the
Auraiya-Dadri segment which is planned to be augmented.
5 IGFL-
Jagdishpur(UP) Presently capacity of
HVJ/DVPL has been augmented but in the in the downstream segment there is capacity constraint in the Auraiya-Dadri segment which is planned to be augmented.
ANNUAL REPORT 9
New Plants
S.No. Name of Unit Status of pipeline connectivity
1 Matix- Burdwan(WB)
This may be connected to GAIL‟s proposed Haldia-Jagdishpur pipeline authorized by GoI
2 JP Industries- Kanpur (UP)
Presently capacity of HVJ/DAVP has been augmented but in the downsteam segment there is capacity constraint in the Auraiya-Jadishpur segment which is planned to be augmented.
Ministry of Petroleum & Natural Gas has
further stated that the fertilizer units need to
enter into commercial agreements with GAIL
relating to sale and transportation (GSA/GTA)
s o t h a t a c t i o n c a n b e i n i t i a t e d f o r
augmentation/booking of capacity in the
relevant pipelines.
3.7 REVIVAL OF CLOSED UREA UNITS OF FCIL & HFCL
3.7.1 In order to make the country self sufficiency in
the indigenous production of Urea, the
Government has decided to revive the eight
closed fertilizer units of Fertilizer Corporation of
India Limited (FCIL) and Hindustan Fertilizer
Corporation Limited. An Empowered
Committee of Secretaries (ECOS) was
c o n s t i t u t e d t o s u b m i t s u g g e s t i o n s
/recommendations for revival of the closed
units of these two PSUs. Based on the
recommendations of the ECOS, a proposal for
revival of these units of HFCL & FCIL alongwith
a Draft Rehabilitation Scheme was submitted
for consideration of Cabinet Committee on
Economic Affairs (CCEA). It was proposed to
revive the three closed units namely Sindri,
Ramagundam, Talcher units of FCIL through
Nomination route to the consortium of the
Public Sector Undertakings (PSUs) and five
closed units namely Gorakhpur, Korba of FCIL
and Durgapur, Haldia and Barauni of HFCL
through Bidding route. The CCEA has approved
the proposal. Revival of each fertilizer unit will
result in increase of indigenous production of
urea by approximately 1.2 Million Metric tonne
per annum.
3.8 JOINT VENTURES ABROAD
3.8.1 Due to constraints in the availability of Gas in
the country, which is the preferred feed stock for
production of nitrogenous fertilizers, a near total
dependence on imports for Phosphatic fertilizer
and its raw materials and full import
dependence for MOP, the Government has
been encouraging Indian companies to
establish Joint Ventures abroad in Countries
which are rich in fertilizer resources for
p r o d u c t i o n f a c i l i t i e s w i t h b u y b a c k
arrangements and to enter into long term
agreements for supply of fertilizers and fertilizer
inputs to India. Further, the Department is also
working with the goal of having access to /
acquisition of the fertilizer raw materials abroad.
3.8.2 The details of the existing joint ventures abroad
in the fertilizer sector are:
A. OMIFCO OMAN
Krishak Bharati Cooperative Ltd. (KRIBHCO),
Indian Farmers Fertilizers Cooperatives Ltd.
(IFFCO) and Oman Oil Company with
respective share holding of 25%, 25% and 50%
have collaborated and set up a world class
urea-ammonia fertilizer plant 'Oman India
Fertilizer Company (OMIFCO), in Oman at a
cost of US $ 892 million. It consists of 5060
MTPD granular urea and 3500 MTPD Ammonia
plants along with utilities in the coastal town of
Sur in Oman. The annual capacity of the
fertilizer complex is 16.52 lakh MT of granular
Urea. The entire quantity of Urea is taken by the
Government of India as per Urea Off-Take
Agreement (UOTA) at pre determined prices.
Government of India also off takes surplus
quantity of Urea, if any, as per price agreed for
the additional quantity. In addition, 2.5 lakh MT
of surplus Ammonia per year is also produced
by the Plant for which IFFCO has Ammonia Off-
10 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
Take Agreement (AOTA). OMIFCO is
examining possibility of expansion and increase
in production of Urea and Ammonia.
B. ICS SENEGAL
The Government of India (GoI), Indian Farmers
Fertilizer Cooperative Ltd. (IFFCO) and
S o u t h e r n P e t r o c h e m i c a l s I n d u s t r i e s
Corporation Ltd. (SPIC) formed a joint venture
company in Senegal named Industries
Chimiques du Senegal (ICS). Later on SPIC
withdrew from the project. In recent past, the
company suffered financial losses. However,
ICS Senegal has been restructured in 2008 with
Government of India, IFFCO and other Indian
c o n s o r t i u m p a r t n e r s h a v i n g 8 5 % a n d
Government of Senegal having 15% share.
The restructuring plan after having been
approved by the Regional High Court of Dakar
(Senegal) on 27.3.2008 has come into effect
and ICS Senegal, as restructured is in
operation.
ICS Senegal has a capacity to produce 6.60
lakh tones of phosphoric acid per annum and
also finished phosphate fertilizer such as DAP
and Complex fertilizers. A major portion of the
phosphoric acid, about 5.5 LMT produced in the
ICS plant is off-taken by IFFCO as per a long
term buy back arrangement and utilized for
production of phosphate fertilizers in India. The
finished fertilizers DAP and complex fertilizers,
produced by ICS Senegal is for domestic
consumption in Senegal.
C. IJC JORDAN
SPIC, Jordan Phosphates Mines Company Ltd.
(JPMC) and Arab Investment Company (AIC)
set up a joint venture project, Indo-Jordan
Chemicals Company Limited (IJC) in Jordan in
May 1997 with a capacity of 2.24 lakh tonnes of
phosphoric acid production per annum. 52.17%
of the equity of the joint venture is held by SPIC,
34.86% by JPMC and 12.97% by AIC.
Phosphoric Acid produced by IJC is off-taken
by SPIC and other fertilizer units in India.
D. IMACID MOROCCO
IMACID, a joint venture between Office
Cherifien des Phosphates (OCP), Morocco,
and Chambal Fertilizers & Chemicals Ltd.
(CFCL), India to produce 3.60 lakh MT of
phosphoric acid per annum was commissioned
in Morocco in October 1999. After subsequent
joining of Tata Chemicals Limited (TCL),
capacity of the plant has been increased to 4.30
LMT per annum. Initially, equity of US$ 65
million in the venture was held by OCP & CFCL
equally. Subsequently, in May 2005, both OCP
& CFCL have sold one-third of their equity stake
in IMACID to TATA Chemicals Limited.
3.8.3 OVERSEAS JOINT VENTURES UNDER
IMPLEMENTATION / CONSIDERATION
A. JIFCO JORDAN
Indian farmers Fertilizers Cooperative Ltd
(IFFCO) and Jordan Phosphate Mining
Company (JPMC) have agreed for setting up of
a joint-venture Phosphoric Acid production
plant, Jordan India Fertilizer Company (JIFCO)
in Jordan with an installed capacity of 1500 MT
of phosphoric acid per day (MTPD) or 4.3 Million
Tonne Per Annum . Equity holding in the project
is 52:48 between IFFCO and JPMC,
respectively. The plant is expected to be
commissioned by 2013.
B. TIFERT TUNISIA
Gujarat State Fertilizers & Chemicals Ltd
(GSFC) and Coromandel International Ltd
(CIL), formerly Coromandel Fertilizers
Ltd.(CFL) both Indian entities alongwith Groupe
Chimique Tunisien (GCT) & Compagnie Des
Phosphates De Gafsa (CPG), both Tunisian
entities are setting up a joint venture project,
Tunisian Indian Fertilisers S.A. (TIFERT) at
Skhira in Tunisia for production of 3.6 lakh MT of
Phosphoric Acid per annum. The entire
production of phosphoric acid would be for off
take by GSFC and CIL. An MOU to this effect
was signed in October, 2005 between parties.
Estimated cost of the project is approx. US $
165 million + 5% with equity of US $66 million
ANNUAL REPORT 11
and borrowings of US $99 million. The project is
expected to be commissioned by end of the
year 2011-12.
C. COOPERATION IN SYRIA
The India-Syrian Joint Commission in its
meeting held in January 2008 took note of the
mutual interest of both countries in the field of
Phosphatic raw-materials and products. It was
agreed that both countries would work for
cooperation in the fertilizer sector in Syria.
Accordingly, a consortium of Indian entities
including MECON, RITES and PDIL (All central
Government PSUs), having expertise in the
fields of mining, beneficiation, processing,
setting-up and running the phosphatic plants
and logistic aspects are undertaking capacity
e n h a n c e m e n t c o n s u l t a n c y s t u d y w i t h
GECOPHAM in Syria. Government of India is
funding the study. As per the MOU signed
between this Department and GECOPHAM in
May 2009, the Indian consortium undertook the
feasibility studies, which have now been
completed and the Pre-Feasibility Report has
been submitted to the Syrian Authorities. A
Government level MOU spelling out broad
frame work of cooperation in Phosphate sector
between the Countries has also been signed in
Oct' 2010. The consortium has submitted the
Feasibility Report to GECOPHAM. The
authorities concerned in Syria have to consider
the report. For the reason of ongoing socio-
political situation in Syria, matter is stand still at
present, however, the DOF is keeping a close
watch in the matter.
D. COOPERATION WITH RUSSIA
On 12.03.2010 an MOU has been signed
between the Government of India and the
Government of Russia, during the visit of Prime
Minister of Russia to India, envisaging inter-alia
encouraging collaboration in the areas of trade,
production, possible establishment of Joint
Ventures, investment and R&D activities,
exchange of information and holding of
consultations on the issues of production and
consumption of mineral fertilizers, exchange
experience encourage contacts between the
specialists, organization of Joint Conferences,
symposia and business events on the issues of
Co-operations in the sector of mineral fertilizers.
In the follow-up a senior level officers visited
Russia in November'2011 to discuss with the
various Russian entities about possibilities of
Joint Ventures for production of Potash in
Russia. Some proposals have been received,
which are being examined in the Department.
E. COOPERATION IN INDONESIA
A team led by the Secretary (F) visited
Indonesia during 30.10.2010 to 02.11.2010 to
hold preliminary discussions with the
Indonesian Authority to ascertain the technical
feasibility of putting up of an Ammonia Urea
plant based on Coal Gasification Technology.
During the visit of the President of Indonesia as
Chief Guest on occasion of the Republic Day is
January 2011 following two documents have
been signed:
(i) MOU for setting up an Ammonia Urea Plant in
Indonesia and agreement for off-take of surplus
urea produced in the plant.
(ii) Agreement for supply of 3 L MT of Urea and 2.5
LMT of NPK Complex fertilizer in designated
grades.
M/s Rashtriya Chemicals & Fertilizers Ltd.
(RCFL) is pursuing with the Indonesian
Authorities about the proposal for JV Ammonia
– Urea Plant in Indonesia. The Indonesian
Authorities have assured for the full cooperation
to RCFL in this regard.
F. COOPERATION IN AUSTRALIA
Indian Farmers Fertilizer Cooperative Ltd
(IFFCO) has entered into a 'Principles of Off-
take Agreement' with Legend International
Holdings of Australia to undertake joint mining
of rock phosphate in Lady Annie mines
(Georgina Basins in Queens land) along with an
assured three million MT annual off-take. A total
of US $800 million investment has been
envisaged for undertaking rock phosphate
12 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
mining in Australia. IFFCO would provide both
technical and financial facilitation to Legend
International Holdings in the development of its
and the Government of Belarus on 27.08.2011.
As per Protocol follow up action are in progress
regarding long term agreement for supply of
phosphate mining and shipment of its product to potash from Belarus to India at concessional
India. price and the possible equity acquisition in
G. COOPERATION IN GHANA OJSC Belaruskali by Indian entities. Firm
quantities of Potash for off-take to India over the Given its gas reserves, Ghana is considered a next 7 years beginning from the year 2012, have
rich source of nitrogenous feedstock. Chairman been communicated to Belarusian company
of Ghana National Petroleum Corporation and the negotiations on prices are going on. As
(GNPC), Ghana during his visit to India, in regards, exploring possible equity acquisition in
September 2009 and discussed with the Belaruskali, this Department is pursuing the
Secretary (F) the possibility of cooperation in matter with the concerned authorities in Belarus
Fertilizer sector was discussed. It was proposed in consultation with MEA and the Indian Mission
to set-up a Ammonia-Urea plant (Gas based) in in the Country.
Ghana. To give proper shape to the project I.
CO-OPERATION WITH MALI proposal, an MOU has been signed in July 2010 at the Government level between the Countries. The President of Mali was scheduled to visit
As per MOU, to proceed further a technical India during 11th
– 12th
of January, 2012.
team comprising of Officers from RCF & PDIL Keeping in view the availability of Phosphate
visited Ghana. Site selection Report and the resources in the country, DOF proposed to
Pre-feasibility reports were prepared by RCF enter into an MOU with Mali. Accordingly, a
and PDIL, which were provided to Ghanaian copy of the draft MOU was sent to MEA on 2nd
Authorities. In January'2011 a team led by January, 2012 with a request to consider the
Secretary (F) visited Ghana to discuss further same in consultation with the L&T Division of
modalities in the matter. Ghanaian Authorities
have been requested for an early decision on
pricing of Gas.
MEA and also for pursuing the same with the
Government of Mali. The response from Mali is
awaited.
The Government of Ghana has conveyed that 3. 8.4 DISCUSSIONS FOR COOPERATION IN
their Cabinet has formally given its approval for FERTILIZER SECTOR
formation of the Ghana-India Joint Venture Discussion are on with the fertilizer and mining Fertilizer Company (with 1 million tone entities in following resource rich countries for
production capacity). The Share Structure as
approved by the Cabinet of Ghana is 48% for
RCF (India) and 52% for the Government of
Ghana. RCF has prepared the draft Joint
Venture Agreement and a copy of the same has
b e e n c o m m u n i c a t e d t o t h e G h a n a i a n
Authorities for their consideration. It is likely to
finalize the JV Agreement by both the sides at
an early date.
H. CO-OPERATION WITH BELARUS
During the visit of a delegation led by Secretary
(East), Ministry of External Affairs a Protocol
was signed between the Government of India
long term cooperation for setting up of projects
for production and off take of fertilizers:
(i) Discussion at Government level is underway
w i t h t h e G o v e r n m e n t o f S e n e g a l f o r
development of Matam phosphate mines.
(ii) Two separate consortia of Indian entities
comprising IPL & IFFCO and MMTC & RCF are
in discussion with M/s Potash One and M/s
Athabasca Inc respectively of Saskatchewan
province for setting up Joint Venture projects in
mining of Potash and off take to India.
Consortium of RCF and MMTC, which is
pursuing with Athabasca, have signed an MOU
ANNUAL REPORT 13
for JV project with Athabasca for evaluation and
assessment in technical, marketing and
financial aspect. They have also signed a
confidentiality agreement for sharing related
information. Consortium of IFFCO and IPL have
requested PotashOne for providing detailed
costing and other economic parameters
involved in the project.
(iii) RCF and IDC/FOSKOR of South Africa are
exploring the possibilities to set up a Phosphoric
Acid and Ammonia-Urea fertilizer project near
Maputo Port, the capital city of Mozambique.
The project proposes to source Rock from the
new mines of Foskor in Phalaborwa, South
Africa. An MOU has been signed between RCF
and IDC/FOSKOR. Department of Fertilizers
has been pursuing with M/s SASOL, for
allocation of gas in Mozambique for setting up a
JV ammonia-urea project.
(iv) Discussions are also going on for exploring
possibilities for an Ammonia-Urea project Qatar
with buy back by India. IFFCO and QUAFCO
(Public sector entity of Qatar) have signed
'Agreement of Intention' on 24.2.2009 for the
same.
(v) M/s Nagarjuna Fertilizers & Chemicals Ltd.
(NFCL) is pursuing with the Government of
Nigeria for setting up of Ammonia – Urea Joint
Venture Fertilizer Project in Nigeria. The
Nigerian Government has assured about
supply of adequate quantity of gas for the
project. The prices of the gas for the project
have also been finalized.
*****
14 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
3
CHAPTER -4
4.1 AVAILABILITY OF MAJOR FERTILIZERS DURING 2011-12
CONTROLLED FERTILIZER – UREA
4.1.1 The availability of urea, which is the only
fertilizer under price and partial movement
control of Government, remained satisfactory
throughout the Kharif 2011 season as well as
during the current Rabi 2011-12 (upto
December, 2011).
KHARIF 2011
4.1.2 The field opening stock of 4.25 LMT as on
1.4.2011 coupled with indigenous production
of 108.16 LMT and imports of 33.82 LMT
helped in progressively ensuring adequate
availability to the States throughout the
season. The cumulative availability of urea at
the end of the season was nearly 146.23
LMT against the assessed requirement of
142.16 LMT. The sales were of 139.21 LMT
urea during Kharif 2011.
anywhere in the country at notified maximum
retail price.
4.2 DECONTROLLED FERTILIZERS – DAP &
MOP
KHARIF 2011
4.2.1 In case of fertilizers other than the urea, which
are decontrolled, no allocation is made under
Essential Commodities Act (ECA) by the
Central Government. Assessment of
requirement of Urea, DAP and MOP is being
made by the Department of Agriculture &
Cooperation to enable better monitoring of
availability at the national level.
4.2.2 DAP and MOP are the two major decontrolled
and decanalised fertilizers, which may be
imported freely.
DAP
4.2.3 The imports of 40.23 LMT of DAP coupled
with indigenous production of 19.67 LMT and
the opening stock of 0.90 LMT of DAP as on
RABI 2011-12 1st
April, 2011 resulted slightly less
4.1.3 The requirement of urea for Rabi 2011-12 has
been assessed at 162.80 LMT envisaging a
growth of about 4.31% over the sales of
156.08 LMT in Rabi 2010-11. The
requirement is being met from the opening
stocks taken together with estimated
production of 112.97 LMT and imports of
about 45,00 LMT during the season. Thus
the cumulative availability of urea for Rabi
2011-12 has been estimated to be about
157.97 LMT by the end of 31st
March, 2012.
4.1.4 Allocation of urea was restricted to 50% of
production of installed capacity of each
manufacturer during Kharif 2011 and Rabi
2011-12. The manufacturers are free to sell
the remaining quantity of urea to the farmers
availability of about 60.80 LMT DAP during
Kharif 2011 season against the assessed
requirement of 71.38 LMT. The sales of DAP
in Kharif 2011 were about 48.71 LMT.
MOP
4.2.4 The imports of 5.51 LMT of MOP taken
together with opening stock of 5.22 LMT as
on 1st
April, 2011 resulted in availability of
about 10.73 LMT during Kharif 2011 season
against the assessed requirement of 22.54
LMT. The sales of MOP were reported as
about 7.00 LMT.
RABI 2011-12
DAP
4.2.5 The production of DAP during Rabi 2011-12 is
ANNUAL REPORT 15
estimated to be about 22.83 LMT. Stocks as
on 1.10.2011 coupled with estimated imports
will be adequate in meeting the country's
requirement of DAP assessed at 54.79 LMT
during Rabi 2011-12, considering that about
4.04 LMT of DAP will be surplus towards the
requirement of Rabi 2011-12.
During the current year, there is a shortage of
DAP because of the political disturbances in
the Middle East and gulf countries which is
main source of DAP import. During the Zonal
Conference organized by Department of
Agriculture and Cooperation (DAC), it was
clearly indicated to all the State Governments
that there will be a shortage of DAP fertilizer
during current year.
MOP
4.2.6 Stocks of MOP as on 1.10.2011 coupled with
adequate imports till March 2012 will ensure
that the country's requirement of MOP during
Rabi 2011-12 is fully met.
As regards MOP, there is tightness in
availability of MOP during current year.
There is no viable source of Potash in the
country as such the entire demand of MOP is
met through imports. During the current year
up to the month of July, contracting for import
of MOP could not be materialized due to
s u b s t a n t i a l i n c r e a s e o f p r i c e s a n d
cartelization by MOP producers in the
International market. The contracting of MOP
took place only in the month of August. As a
result, MOP availability for direct application
as well as for indigenous production of NPK
fertilizers will be comfortable in Rabi 2011-12.
Following table summarizes the season-
wise position in respect of the availability and
sales of the major fertilizer i.e. Urea, DAP &
MOP during the last three seasons:
Crop season Demand
Assessment Cumulative
Availability Cumulative
Sales % age of
availability to assessed demand
Kharif 2010 Urea DAP MOP
136.65 68.75 22.98
132.16 79.01 27.51
126.02 65.05 19.63
96.71 114.92 119.71
Rabi 2010-11 Urea DAP MOP
154.14 52.17 24.82
165.77 46.64 20.22
156.08 47.63 19.27
107.54 89.40 81.46
Kharif 2011 Urea DAP MOP
142.16 71.38 22.54
146.23 60.80 10.73
139.21 48.71
7.00
102.86 85.17 47.60
4.3 MOVEMENT OF FERTILIZERS
4.3.1 Under the Allocation of Business Rules, the
Department of Fertilizers has been entrusted
the responsibility of ensuring movement,
distribution and allocation of controlled
fertilizer, i.e. urea, from various fertilizer
plants and ports in accordance with the State-
w i s e r e q u i r e m e n t a s s e s s e d b y t h e
Department of Agriculture & Co-operation
(DAC). The distribution of imported urea is
made keeping in view the requirements of
each of the States.
4.3.2 The major share in transportation of fertilizers
is of the Railways. During 2011-12, Railways
had moved about 75% of the fertilizers
produced and/or imported in the country.
4.3.3 Judicious management of the demand-
supply balance has helped in maintaining the
average lead of fertilizer movement by rail.
During 2010-11 the average lead was 827
KMs. During the current year the average
lead for the period April-November, 2011
would also be almost same.
*****
16 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
3
CHAPTER -5
5.1 PLAN PERFORMANCE
5.1.1 The installed capacity and production of
fertilizers in the country at the end of eighth
five year plan, in the terminal year of the ninth
plan and at the beginning of 5th
year of tenth
plan (2006-07) are indicated below:
5.1.3 Year-wise consumption, production and
imports of fertilizers in nutrients terms are
given in Annexure-V
5.1.4 The production of fertilizers in nutrient terms
during 2010-11 was 121.56 LMT of nitrogen
and 42.22 LMT of phosphate. The estimated
INSTALLED CAPACITY AND PRODUCTON OF NITROGENOUS AND PHOSPHATIC FERTILIZERS IN EIGHT, NINTH AND TENTH FIVE YEAR PLANS.
(In lakh MT(LMT))
Sr. No
Particulars At the end of Eighth Five Year Plan
(1996-97)
At the end of Ninth Plan ( 2001-02).
At the beginning of 5th
year of Tenth Plan (2006-07)
1 Capacity i ) Nitrogen ii) Phosphates
97.77 29.05
120.58 52.31
120.61 56.59
2 Production
i ) Nitrogen
ii) Phosphates
85.99
25.56
107.68
38.60
115.78}
45.17}
5.1. 2 The installed capacity of nitrogen and
phosphate in the terminal year (1996-97) of
the eighth plan was 97.77 LMT and 29.05
LMT, respectively. Three major phosphatic
fertilizer plants were commissioned during
the ninth five year plan period, namely, Oswal
Chemicals & Fertilizers Ltd.-Paradeep ( since
t a k e n o v e r b y I F F C O ) , I n d o - G u l f
Corporation-Dahej and Gujarat State
F e r t i l i z e r s C o m p a n y L t d . - S i k k a - I I .
Consequent upon reassessment of urea
capacity on the basis of Dr. Y.K. Alagh
Committee and DAP capacity by Tariff
Commission, despite phasing out of 10 urea
units due to closure, the installed capacity of
nitrogen and phosphate has increased from
97.77 LMT at the end of eighth plan to 120.61
LMT and 29.05 LMT to 56.59 LMT
respectively during the same period.
production for 2011-12 is 125.76 LMT of
nitrogen and 44.32 LMT of phosphate.
Sector-wise targets and achievements in
respect of production and capacity utilization
from 2003-04 onwards are given in
Annexures-VI & VII respectively.
5.2 Plan Outlays
5.2.1 For the Eleventh Five Year Plan (2007-12),
Planning Commission has approved an
outlay of Rs.20627.87 crore consisting of
Rs.1492.00 crore as Domestic Budgetary
Support and Rs.19135.87 crore as Internal &
Extra Budgetary Resources (IEBR).
5.2.2 For the year 2011-12, a plan outlay of
Rs.3550.22 crore was approved by the
Planning Commission with Rs.3325.22 crore
to be met out of IEBR and balance amount of
Rs.225.00 crore as budgetary support. The
ANNUAL REPORT 17
details of Plan outlays are given at made to three loss making PSUs, namely
Annexure-VIII. The gross outlay of BVFCL, FACT and MFL for meeting their
R s . 3 5 5 0 . 2 2 c r o r e i s f o r R a s h t r i y a
Chemicals & Fertilizers Limited (Rs.293.30
crore), FAGMIL (Rs.4.15 crore), Project &
Development India Limited (Rs.9.73 crore),
National Fertilizers Limited (Rs.2363.08
crore), Krishak Bharati Cooperative Limited
(Rs.654.96 crore), Brahmaputra Valley
Fertilizer Corporation Limited (Rs.67.80
crore), Fertilizers & Chemicals Travancore
Limited (Rs.60.74 crore), Madras
Fertilizers Limited (Rs.88.95 crore), and
o t h e r M i s c e l l a n e o u s D e p a r t m e n t a l
schemes such (MIS/IT and R&D) Rs.7.50
crore. Department of Fertilizers is exploring
possibilities of joint ventures abroad. Since
there is no firm proposal in hand right now,
only a token provision of Rs.0.01 crore has
been provided.
5.2.3 Out of the budgetary support provided by
the Government, bulk of allocation was
urgent capital expenditure requirement. A
small amount of Rs.2.00 crore was
earmarked for Grants-in-Aid to various
research institutes for carrying out relevant
research which may be beneficial to the
fertilizer industry in the field of fertilizer
sector under “S&T” Head. Similarly,
another small amount of Rs.5.50 crore was
earmarked for Management Information
Technology (MIT) scheme.
5.2.4 For the year 2011-12, there was net
Budgetary Provision (BE) of Rs 50,245
crore. Rs 225 crore under Plan and Rs 50,020
crore under Non-Plan. In the Revised
Estimates (RE) for 2011-12 the net provision
is Rs 68,225 crore, Rs 225 crore under Plan
and Rs 68,000 crore under Non-Plan. The
details of Non-Plan and Plan provisions in
FY 2011-12 (BE) and (RE) are given in
Annexure-IX.
*****
18 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
3
CHAPTER -6
6.1 MEASURES OF SUPPORT FOR technology, feedstock used, the level of
FERTILIZERS capacity utilization, energy consumption,
6.1.1 For sustained agricultural growth and to
promote balanced nutrient application, it is
imperative that fertilizers are made available
to farmers at affordable prices. With this
objective, urea being the only controlled
fertilizer, is sold at statutorily notified uniform
sale price, and decontrolled phosphatic and
potassic fertilizers are sold at indicative
maximum retail prices (MRPs). The problems
faced by the manufacturers in earning a
reasonable return on their investment with
reference to controlled prices, are mitigated
by providing support under the New Pricing
Scheme for urea units and the Concession
Scheme for decontrolled phosphatic and
potassic fertilizers. The statutorily notified
sale price and indicative MRP is generally
less than the cost of production of the
respective manufacturing unit. The
difference between the cost of production and
t h e s e l l i n g p r i c e / M R P i s p a i d a s
subsidy/concession to manufacturers. As the
consumer prices of both indigenous and
imported fertilizers are fixed uniformly,
financial support is also given on imported
urea and decontrolled phosphatic and
potassic fertilizers.
6.2 MEASURES OF SUPPORT FOR UREA
6.2.1 Until 31.3.2003, the subsidy to urea
manufacturers was being regulated in terms
of the provisions of the erstwhile Retention
Price Scheme (RPS). Under RPS, the
difference between retention price (cost of
production as assessed by the Government
plus 12% post tax return on networth) and the
statutorily notified sale price was paid as
subsidy to each urea unit. Retention price
used to be determined unit wise, which
differed from unit to unit, depending upon the
distance from the source of feedstock/raw
materials, etc. Though the RPS did achieve
its objective of increasing investment in the
fertilizer industry, and thereby creating new
capacities and enhanced fertilizer production
along with increasing use of chemical
fertilizers, the scheme had been criticized for
being cost plus in nature and not providing
incentives for encouraging efficiency.
6.2.2 Given the importance of fertilizer pricing and
s u b s i d i z a t i o n i n t h e o v e r a l l p o l i c y
environment, which has direct implications
with reference to the growth and development
of agriculture and sustainability of the fertilizer
industry, the need for streamlining the subsidy
scheme in respect of urea producing units
had been felt for a long time. A High Powered
Fertilizer Pricing Policy Review Committee
( H P C ) w a s c o n s t i t u t e d , u n d e r t h e
chairmanship of Prof. C.H. Hanumantha Rao,
to review the existing system of subsidization
of urea, suggest an alternative broad-based,
scientific and transparent methodology, and
r e c o m m e n d m e a s u r e s f o r g r e a t e r
cohesiveness in the policies applicable to
different segments of the industry. The HPC,
in its report submitted to the Government on
3rd
April 1998, inter-alia, recommended that
unit-wise RPS for urea may be discontinued
and, instead, a uniform Normative Referral
Price be fixed for existing gas based urea
units and also for DAP and a Feedstock
Differential Cost Reimbursement (FDCR) be
given for a period of five years for non-gas
based urea units.
6.2.3 The Expenditure Reforms Commission
(ERC), headed by Shri K.P. Geethakrishnan,
had also examined the issue of rationalizing
fertilizer subsidies. In its report submitted on
ANNUAL REPORT 19
2 0
t h S e p t e m b e r 2 0 0 0 , t h e E R C power and water. Under the scheme, no
recommended, inter-alia, dismantling of
existing RPS and in its place the introduction
of a Concession Scheme for urea units based
on feedstock used and the vintage of plants.
6.2.4 The recommendations of ERC were
examined in consultation with the concerned
Ministries/Departments. The views of the
f e r t i l i z e r i n d u s t r y a n d t h e S t a t e
G o v e r n m e n t s / U n i o n t e r r i t o r i e s , a n d
economists/research institutes were also
obtained. After due examination of all these
views, a New Pricing Scheme (NPS) for urea
units for replacing the RPS was formulated
and notified on 30.1.2003. The new scheme
took effect from 1.4.2003. It aims at inducing
the urea units to achieve internationally
competitive levels of efficiency, besides
bringing in greater transparency and
simplification in subsidy administration.
6.2.5 New Pricing Scheme (NPS) for urea was
introduced w.e.f. 1st
April, 2003. The Stage-I
of NPS was of one year duration from 1st April,
2003 to 31st
March, 2004 and Stage-II was of
reimbursement is allowed in respect of
investment made by a unit for improvement in
its operations nor are the gains as a result of
operational efficiencies to be mopped up.
6.2.8 It has also been provided under the scheme
that the concession rates during Stage-II shall
be adjusted for reduction in capital related
charges and enforcement of efficient energy
norms. Pre-set energy norms for urea units
during Stage-II of NPS have already been
notified and intimated to urea units.
Reduction in rates of concession during
Stage-II of NPS for urea units on account of
reduction in capital related charges have also
been notified and intimated to urea units.
6.3 PHASED DECONTROL OF UREA
DISTRIBUTION
6.3.1 As per the New Pricing Scheme for urea
units, it was also envisaged that decontrol of
urea distribution/movement will be carried out
in a phased manner. During Stage-I, i.e.
from 1.4.2003 to 31.3.2004, the allocation of
two year duration from 1st
April 2004 to urea under the Essential Commodities Act
31st
March, 2006. With the Stage-III of NPS
being implemented w.e.f. 1st
October, 2006,
the Stage-II of NPS stands extended upto 31st
September, 2006.
6.2.6 Under NPS, the existing urea units have been
divided into six groups based on vintage and
feedstock for determining the group based
concession. These groups are : Pre-1992
gas based units, post-1992 gas based units,
pre-1992 naphtha based units, post-1992
naphtha based units, fuel oil/low sulphur
heavy stock (FO/LSHS) based units and
mixed energy based units. The mixed energy
based group shall include such gas based
units that use alternative feedstock/fuel to the
extent of more than 25% as admissible on
1.4.2002.
6.2.7 Under NPS, escalation/de-escalation is given
in respect of variable cost related to changes
in the price of feedstock, fuel, purchased
1955 (ECA) was restricted up to 75% and
50% of installed capacity (as reassessed) of
each unit in Kharif 2003 and Rabi 2003-04,
respectively. It was further envisaged that
during Stage-II commencing from 1.4.2004,
urea distribution will be totally decontrolled
after evaluation of Stage-I and with the
concurrence of the Ministry of Agriculture.
6.3.2 The total decontrol of urea distribution was
deferred initially for a period of six months
w.e.f. 1.4.2004 i.e., up to Kharif 2004, which
has been subsequently deferred up to Rabi
2005-06 i.e., up to 31.3.2006. The existing
system of 50% ECA allocation and 50%
outside ECA allocation has been extended
upto 31-3-2010.
6.3.3 The pricing policy for urea units for Stage-III
of New Pricing Schemes (NPS) which is
effective from 1.10.2006 to 31.3.2010 has
been formulated keeping in view the
20 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
recommendations of the Working Group set
up under the Chairmanship of Dr. Y.K.
Alagh. The salient features of Stage-III
Policy which is aimed at promoting further
investment in the urea sector, are to
maximize urea production from the Urea
units including through conversion of non-
gas based Units to gas, incentivizing
additional urea production and encourage
investment in Joint Venture (JV) projects
abroad. It is also aimed at establishing a
more efficient urea distribution and
movement system in order to ensure
availability of urea in the remotest corners of
the country.
6.3.4 The Stage-III policy seeks to promote
usage of most efficient and comparatively
cheaper feed stock natural gas/LNG for
production of urea in the country. The policy
lays down a definite plan for conversion of
all non-gas based urea units to gas. At
present, there are 8 urea units (MFL,SPIC,
ZIL, MCFL, GNFC, NFL-Nangal, NFL-
Bhatinda, NFL-Panipat) in the country
which are based on naphtha or FO/LSHS as
feed stock. All these 8 units are required to
switch over to natural gas/LNG within a
period of next three years. Beyond this time
limit, the high cost urea produced by these
non-gas based units will not be entitled to
subsidy at the existing levels and it will be
restricted to import parity price of urea. The
units, which are unable to tie up gas will
have to explore alternative feedstocks like
Coal Bed Methane (CBM) and coal gas.
SFC has started using gas w.e.f.
22.9.2007.
6.3.5 The availability of gas is critical to the
growth of urea industry in the country.
Presently, the indigenous availability is not
sufficient to meet the demand of existing
gas based urea units in the country. To this
end, the Department of Fertilizers
constituted a Committee under the
chairmanship of Secretary(P&NG) with
S e c r e t a r y ( F e r t i l i z e r s ) , S e c r e t a r y
( E x p e n d i t u r e ) , S e c r e t a r y ( P l a n n i n g
Commission) as its members to deliberate
upon various issues relating to connectivity
and assured supply of gas to the fertilizer
sector. The Committee will also develop an
appropriate mechanism for fixing the price
of the gas in a transparent manner. It was
expected that the availability of gas in the
country will improve from 2008-09 onwards
and the new policy, taking into account the
above fact, has laid down specific timelines
for conversion of all non-gas based units in
the country to gas.
6.3.6 In order to incentivize conversion of non gas
based units to gas, the policy provides for a
regime where there will be no mopping up of
energy efficiency for a fixed period of five
years for naphtha based as well as
FO/LSHS based units. The policy also
recognizes the comparative higher cost of
conversion of FO/LSHS based units to gas
and provides for one time capital investment
assistance to these units for conversion to
gas during the next three years. A specific
policy to this effect has been announced by
the Government on 6th
March 2009..
6.3.7 The policy also lays down a formulation to
dis-incentivize high cost production from the
non-gas based units and to facilitate their
early conversion to gas. It is proposed that
these units may be allowed to produce
100% of capacity should they adhere to an
agreed timetable for conversion to Gas and
tie up requisite Gas/CBM/Coal gas. If they
do not, they will be given only 75% of the
fixed costs beyond 93% of capacity
utilization in the 1st
year (1.4.2007) and 50%
of the fixed cost beyond 93% capacity
utilization from 2nd
year (1.4.2008) onwards.
6.3.8 C o n s i d e r i n g t h e l i k e l y g r o w t h i n
consumption of urea in the years to come,
the policy seeks to encourage the existing
urea units to produce beyond 100% of their
installed capacities by introducing a system
of incentives for additional urea production
ANNUAL REPORT 21
subject to merit order procurement. The
policy of requiring prior Government
permission for additional urea production
has been dispensed with. All production
between 100% and 110% of the existing
reassessed capacity will be incentivized on
the existing net gain sharing formula
between the Government and the unit in the
ratio of 65:35 respectively with the proviso
that the total amount paid to the units after
including the component of variable cost will
be capped at the units own concession rate.
The units increasing production beyond
110% will be compensated at their
concession rate subject to the over all cap of
Import Parity Price (IPP). To the extent
Government does not require any quantities
o f a d d i t i o n a l p r o d u c t i o n , t h e u r e a
companies would be free to dispose of the
remaining quantities by way of export or
sale to complex manufacturers without any
permission. The policy also encourages
setting up of Joint Venture projects abroad
where gas is readily available at reasonable
p r i c e s . I t r e c o g n i z e s o u r h e a v y
dependence on imported raw materials/
intermediates and feedstock in the fertilizer
sector and to properly leverage this
position, the policy seeks to create
s p e c i a l i z e d a g e n c y t o c o o r d i n a t e
investments abroad in fertilizer sector.
6.3.9 The policy seeks to rationalize distribution
and movement of urea and the system of
freight reimbursement with the objective of
ensuring availability of urea in all parts of the
country. The Government will continue to
regulate movement of urea up to 50% of
production depending upon the exigency of
the situation. The State Governments will
be required to allocate the entire quantity of
planned urea arrivals including both
regulated and de-regulated urea in district-
wise, month-wise and supplier-wise format.
The units will be required to maintain a
district level stock point and the subsidy will
be paid only when the urea reaches the
district. The monitoring of movement and
distribution of urea throughout the country
up to the district level will be done by an On
line Web based monitoring system. To
facilitate movement of fertilizers to far flung
area, the reimbursement of freight will be
based on actual leads for rail and road
movement. The rail freight will be
reimbursed as per the actual expenditure
and the road freight will be escalated as per
composite road transport index every year.
One time enhancement of 33% will be
granted on the road component of primary
freight to offset the impact of Supreme Court
directive regarding maximum truck load
limit of 9 MT on road vehicles. The existing
special freight subsidy scheme will continue
for supply of urea to the North Eastern
States except Assam and Jammu &
Kashmir. In addition, the Department will
operate a buffer stock through the state
institutional agencies/fertilizer companies in
major urea consuming States up to a limit of
5% of the seasonal requirement.
6.3.10 The Stage-III of NPS seeks to carry on the
existing 6 group classification of urea
manufacturing units in the country with
updation of all costs upto 31st
March, 2003.
The respective pre-set energy consumption
norm of each urea units during Stage-II of
NPS or the actual energy consumption
achieved during the year 2003, whichever is
lower, will be recognized as the norm for
Stage-III of NPS. The policy also provides
for updation of costs on account of cost of
bags through 3 year moving weighted
average cost of bags to compensate for the
rise in prices for the last three years. It also
provides for payment of sales tax on input
and other taxes recognized under erstwhile
Retention Price Scheme, on actual basis.
6.3.11 NPS Stage-III seeks to take forward the
principles of uniformity and efficiency in
22 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
urea production as enunciated during Stage I
and II of NPS and also aims at bringing in
more transparency in distribution of fertilizers
across the country. It is expected that the
policy will encourage increase in indigenous
production from the existing urea units in the
country and facilitate early conversion of non-
gas based units to gas leading to substantial
savings in subsidy. It is also expected that
with the launch of Fertilizer Monitoring
System (FMS) to monitor movement of
fertilizers upto district level and the freight
rationalization proposed in the new policy, the
distribution of fertilizers in remote corners of
the country will improve considerably without
any complaints of shortages in future. The
Department of Fertilizers will continue its
endeavour to promote the growth of fertilizer
industry in the country and ensure adequate
availability of fertilizers to the farmers.
6.4 AMENDMENTS TO STAGE – III OF NEW
PRICING SCHEME (NPS)
6.4.1 The Stage-III of New Pricing Scheme (NPS)
is being implemented w.e.f. 1st
October, 2006
and will be effective till March, 2010. In the
Policy proposal approved by CCEA, it was
mentioned that some urea units such as
Nagarjuna Fertilizers & Chemicals Ltd.
(NFCL), Kakinada, Southern Petrochemicals
Industries Corporation Ltd. (SPIC), Tuticorin
etc. has represented that the implementation
of group based NPS in place of unit specific
cost plus Retention Price Scheme (RPS) has
resulted in certain under recoveries of their
individual costs of production. It was
proposed to take appropriate action in these
cases on merits in consultation with
Department of Expenditure (DoE).
6.4.2 Accordingly, after notification of NPS-III on
8th March, 2007, a number of units have
represented to Department of Fertilizers
indicating the under recoveries on account of
various provisions of the group based NPS.
The issues raised by the units have been
examined within the Department and these
can be divided into two categories. The first
issue relates to losses due to group
averaging, and the second issue relates to
increase in capacity utilization norms for NPS
Stage-III.
6.4.3 It was found that some of the companies are
losing upto 85% of their fixed cost due to the
group averaging principle followed under
N P S - I I I , m a k i n g t h e i r o p e r a t i o n s
unsustainable from day one. Thus, there was
a need to limit the reduction due to averaging
procedure for various units so as to ensure
sustainability of production while encouraging
efficiency. It has been, therefore, decided to
restrict the reduction in fixed costs of a unit
due to group averaging under NPS-III to 10%
of the total fixed cost of the unit, w.e.f 1st April
2009 onwards.
6.4.4 It was also found that for all the companies
the capacity utilization norms have been
increased by 3% from NPS-II stage to NPS-
III. However, for post-92 Naphtha based
group it has been increased by 8% on the
pretext that the units have converted to gas.
But since the cost of conversion is not borne
by GOI, an indiscriminate increase by 8% for
this group has put the units under this group at
a disadvantage. It was thus decided to take
capacity utilization for post 1992 naphtha
group at 95%, instead of earlier approved
98% under NPS-III, for calculation of notional
retention price of the units within the group, if
there has been no recognition of cost of
conversion under NPS-III.
6.5 UREA POLICY BEYOND NPS-III
6.5.1 The tenure of NPS Stage-III policy expired on
31st
March 2010. The provisions of the NPS-
III policy has since been extended
provisionally till further order. Now the policy
beyond NPS-III is under consideration of
ANNUAL REPORT 23
Government. The Group of Ministers (GoM)
constituted to review the fertilizer policy has
decided in its meeting held on 5th
January
2011 to constitute a Committee under the
Chairmanship of Dr. Saumitra Chaudhuri,
Member Planning Commission to examine
the proposal for introduction of NBS in urea,
including various options therefore, and make
suitable recommendations. The committee
has also to examine the issues relating
to investment policy and amendments
proposed therein, and make appropriate
recommendations.
6.5.2 The Committee constituted under the
Chairmanship of Dr. Saumitra Chaudhuri,
Member Planning Commission has submitted
its report on 26-04-2011 on the proposal for
Nutrient Based Subsidy in Urea sector. The
Group of Ministers, considered the report of
the Committee of Secretary in its meeting
held on 5th
August 2011 and directed that the
proposal on Nutrient Based Subsidy (NBS)
for Urea may be placed before CCEA along
with the proposal of Department of Fertilizers
and the views of Minister of Chemicals &
Fertilizers and sought directions of CCEA.
Draft Note for consideration of CCEA was
circulated on 25-11-2011 for Inter-Ministerial
comments. Final CCEA Note, incorporating
comments of all Ministries/Departments, is
being finalised.
6.6 MRP OF UREA
6.6.1 The MRP of urea since 2003 was Rs. 4830/-
per tonne. The MRP of urea has increased to
Rs. 5310/- per tonne w.e.f. 1st
April 2010. The
MRP fixed is exclusive of CST, Sales Tax and
Central Excise Duty. There has been no
further increase in MRP of urea.
6.7 PRICING POLICY FOR INVESTMENT IN
FERTILIZER SECTOR
UREA
6.7.1 A pricing policy was announced on 29.1.2004
for setting up new urea projects and
expansion of existing urea projects for
augmenting the domestic production capacity
of urea to meet the growing demand for
enhancing the agricultural production in the
country. The new policy aimed at enabling
the entrepreneurs to decide about their
investment plans in the fertilizer sector. The
new policy was expected to encourage
setting up of plants with international
efficiency standards for fresh investment in
new projects and expansion of existing units.
The policy was based on the principle of Long
Run Average Cost (LRAC).
6.7.2 The above policy was not successful in
attracting investment in this sector. The non-
availability of natural gas, which is the critical
feedstock for production of urea, has also
been one of the major constraints in further
addition of indigenous capacity for production
of urea. However with the projected
improved availability of gas from 2009
onwards, it is expected that investment in
fertilizer sector will also take place. The
Government has recently announced on 4th
September 2008, a new investment policy for
urea sector to attract the much required
investment in this sector. The policy is based
on IPP benchmark and has been finalized in
consultation with the industry.
6.7.3 The New Investment Policy aims at revamp,
expansion, revival of existing urea units and
setting up of Greenfield/ Brownfield projects.
The policy was notified keeping in view
adequate availability of gas at reasonable
prices for new investments, which may result
in bridging the gap between the consumption
and domestic consumption. The policy has to
lead to savings to the Government in the form
of availability of Urea at a price below IPP. The
salient features of the new investment policy
are as under :-
I. The policy is based on Import Parity Price
(IPP) benchmarked with suitable floor
24 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
and ceiling prices of USD 250/MT and VII. Allocation of Gas: Only non-APM gas
USD 425/MT respectively. will be considered for the new investment
in urea sector. II. Revamp project: Any improvement in
capacity of existing plants through
investment upto Rs. 1000 crore, in the
existing train of ammonia-urea production
will be treated as revamp of existing units.
The additional urea from the revamp of
existing units will be recognized at 85% of
IPP with the floor and ceiling price as
indicated above.
VIII. Coal gasification based Urea Projects:
The Coal gasification based urea projects
will also be treated on par with a revival or
a Greenfield project as the case may be.
In addition, any other incentives or tax
benefits as provided by Government for
encouraging coal gasification technology
will also be extended to these projects.
IX. Joint Ventures abroad: The Joint III. Expansion projects: Setting up of a Venture projects abroad in gas rich
IV.
new ammonia-urea plant (a separate new
ammonia-urea train) in the premises of
the existing fertilizer plants, utilizing some
of the common utilities will qualify for
being treated as expansion project. The
investment should exceed a minimum
limit of Rs.3000 crore. The urea from the
expansion of existing units will be
recognized at 90% of IPP, with the floor
and ceiling price as indicated above.
Revival/Brownfield projects: The urea
from the revived units of Hindustan
Fertilizer Corporation Limited(HFCL) and
Fertilizer Corporation of India Limited
(FCIL) will be recognized at 95% of IPP
countries are also proposed to be
e n c o u r a g e d t h r o u g h f i r m o ff t a k e
contracts with pricing decided on the
basis of prevailing market conditions and
in mutual consultation with the joint
venture company. However, the principle
for deciding upon the maximum price will
be the price achieved under Greenfield
projects or 95% of IPP as proposed for
revival projects (in absence of any
Greenfield projects) with a cap of USD
405 CIF India per MT and a floor of USD
225 CIF India per MT (inclusive of
handling and bagging costs)
X. Time period for proposed investment
with prescribed floor & ceiling price, if the policy: Only those revamp projects
revival of closed units takes placed in
public sector.
which start production of additional
capacities within four years of notification
of the new policy would qualify for the
V. Greenfield projects: The pricing of dispensation recommended above.
Greenfield projects will be decided based
on a bidding process which will be for a
discount over IPP, after firming up of the
location (States) of the proposed new
plants.
Similarly production from expansion and
revival (brownfield) units that come about
within five years of notification of the new
policy would qualify for dispensation
provided in the policy. If the production
does not come through within the
VI. Gas transportation charges: An stipulated time period, such brownfield
additional gas transportation cost will be
paid to units undertaking expansion and
revival on the basis of actuals (upto 5.2
Gcal per MT of urea) as decided by the
Regulator(Gas) subject to a maximum
ceiling of USD 25 per MT of urea.
projects will be treated similar to a
Greenfield projects wherein price will be
decided through limited bidding options.
The time period for setting up of new Joint
Ventures would also be five years under
the new investment policy.
ANNUAL REPORT 25
6.8 IMPACT OF INVESTMENT POLICY ON
FERTILIZER SECTOR 6.9 NUTRIENT BASED PRICING REGIME FOR
ALL SUBSIDIZED FERTILIZERS
6.8.1 The fertilizer Industry has responded 6.9.1 Keeping in view the interests of the farmers
positively towards the New Investment Policy
by initiating investment decision for revamp of and to promote balanced use of fertilizers, the
Department of Fertilizers has notified on 17th
existing capacities. The fertilizer units like June 2008 a nutrient based pricing regime for
IFFCO-Aonla – I & II, IFFCO-Phulpur – I & II, all subsidized fertilizers. It has been further
Chambal Fertilizers and Chemicals Limited decided to fix the farmgate price of nutrients
(CFCL) – Gadepan – I&II, Nagarjuna at the level of their existing price in straight
Fertilizers and Chemicals Limited (NFCL) – fertilizers viz. Urea, DAP, MOP and SSP. This
Kakinada – I & II and the unit of Tata will lead to significant reduction in existing
Chemicals Limited - Babrala have informed Maximum Retail Prices (MRPs) of complex
regarding availability of additional production
of urea after revamp. Further, RCF, Thal;
KRIBHCO- Hazira and NFL, Vijaipur have
undertaken revamp of their units. As regards
expansion projects, six companies viz.
IFFCO, KRIBHCO, Rashtriya Chemicals
a n d F e r t i l i z e r s L i m i t e d , I N D O - G U L F
Fertilizers Limited, TATA Chemicals Limited
and Chambal Fertilizers and Chemicals
Limited have proposed to undertake
expansion of their units. However, these
units have expressed concern regarding
pricing and firm availability of gas before
taking final investment decision to undertake
expansion of their existing units
6.8.2 The Group of Ministers(GoM) constituted to
review the fertilizer policy has decided in its
fertilizers. Under this regime, the farm gate
price of each nutrient will be uniform across
all subsidized fertilizers. The selling price of
subsidized fertilizers will be determined on
the basis of the nutrients contained therein
6.9.2 Under existing pricing regime, the price of
nutrients in complex fertilizers were higher
than the price of same nutrients in other
straight fertilizers like Urea, DAP, MOP and
SSP. This led to comparatively higher usage
of straight fertilizers vis-à-vis complex
fertilizers, which are agronomically better
fertilizer products. The nutrient based pricing
will lead to parity in price of complex fertilizers
with other straight fertilizers and, thus, is
expected to promote balanced fertilization by
encouraging usage of complex fertilizers.
meeting held on 5th
January 2011 to
6.9.3 POLICY FOR ENCOURAGING PRODUC- c o n s t i t u t e a C o m m i t t e e u n d e r t h e
Chairmanship of Dr. Saumitra Chaudhary,
Member Planning Commission to examine
the proposal for introduction of NBS in urea,
including various options therefore, and
make suitable recommendations. The
committee has also to examine the issues
r e l a t i n g t o i n v e s t m e n t p o l i c y a n d
amendments proposed therein, and make
appropriate recommendations. The report of
the Committee on Investment Policy in Urea
sector has been finalised and signed on 7th
January 2012. The report is being placed
before the GoM for directions. A proposal to
amend the New Investment policy is under
consideration of Government.
TION AND AVAILABILITY OF FORTIFIED
AND COATED FERTILIZERS IN THE
COUNTRY
Department of Fertilizers has notified on 2nd
June 2008 a policy for encouraging
production and availability of fortified and
coated fertilizers in the country. In terms of
this policy, the indigenous manufacturers/
producers of the subsidized fertilizers are
a l l o w e d t o p r o d u c e f o r t i f i e d / c o a t e d
subsidized fertilizers up to a maximum of 20%
of their total production of respective
subsidized fertilizers. The manufacturers/
producers are allowed to sell all the FCO
a p p r o v e d f o r t i f i e d / c o a t e d s u b s i d i z e d
26 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
fertilizers, except for Zincated Urea and
Boronated SSP at a price up to 5% above the
MRP of the subsidized fertilizer as indicated
in the table above. For Zincated Urea and
Boronated SSP, the manufacturers are
allowed to charge up to 10% above MRP of
Urea and SSP respectively. In January 2011,
report to Department of Fertilizers on
Finalizing Per KM Per Tonne Rate for
Transportation of Fertilizers by road. These
rates will be escalated by WPI (composite
road transport index) every year. As per the
recommendations made by the Tariff
Commission in their report, the Government
the ceiling of production of Neem Coated has issued a notification on 1st
September
urea which has been incorporated in
Schedule 1 of the Fertilizer Control Order,
1985 has been increased from the existing
limit of 20% to a maximum of 35% of their
total production, company wise of their
respective subsidized fertilizers.
6.9.4 P O L I C Y F O R U N I F O R M F R E I G H T
SUBSIDY ON ALL FERTILIZERS UNDER
THE FERTILIZER SUBSIDY REGIME
To ensure easy availability of fertilizers in all
parts of the country, the Department of
2011 notifying the district wise revised road
transportation rates for UREA dispatches by
all the units with effect from 1st
April 2008.
The normative PTPK rate is to be annually
e s c a l a t e d / d e - e s c a l a t e d b a s e d o n a
composite road transport index as per NPS-
III policy dated 8th
March 2007. In case of
Jammu and Kashmir the rates recommended
by Tariff Commission for Jammu region (Rs
5.29 per km per metric tonne) will be treated
for all the districts in Jammu as well as
Srinagar in J&K. The ad hoc PTPK
Fertilizers has notified on 17th
July 2008 a transportation rates for Himachal Pradesh
uniform freight subsidy regime for all
subsidized fertilizers, wherein freight
subsidy will be paid separately on receipt of
all subsidized fertilizers in the districts/blocks.
The freight subsidy will constitute of two
components, namely, rail freight and road
freight. The rail freight will be paid on actual,
and the road freight will be paid on a
normative average district lead (average of
the actual leads of block headquarters from
the nearest rail rake point) and a normative
per KM rate.
6.9.5 ROAD FREIGHT RATES FOR UREA
MANUFACTURING/IMPORTING UNITS
U N D E R T H E U N I F O R M F R E I G H T
SUBSIDY SCHEME
It was decided in the policy for Stage-III of
New Pricing Scheme for urea manufacturing
units notified on 8th
March 2007 that “Tariff
Commission will be requested to fix Per
Tonne Per Km (PTPK) base rates for road
transportation in the case of secondary
movement of fertilizers from unloading Rake
Point to retail points”. The Tariff Commission
has conducted the study and submitted the
Rs. 4.13 and North-Eastern States ( i.e. Rs.
2.22 PTPK for Arunachal Pradesh, Rs. 4.38
PTPK for Manipur, Rs. 6.39 PTPK for
Meghalaya, Rs. 3.44 PTPK for Mizoram, Rs.
3.50 PTPK for Nagaland, Rs.7.07 PTPK for
Sikkim and Rs. 4.27 for Tripura) will continue
to be as notified earlier.
6.9.6 POLICY FOR CONVERSION OF EXISTING
NON-GAS BASED UREA UNITS TO
NATURAL GAS/LNG FOR FEEDSTOCK/
FUEL
At present there are 8 units in this country
which is based on Naphtha (4) and FOLHS
(4) as feedstock/fuel. Under New Pricing
Policy Stage-III, specific time schedule of
three years has been laid down for
conversion of the non gas based units to gas.
To incentivise conversion of non gas based
units to gas, it has been decided that units will
be allowed to keep the savings on account of
improved energy efficiency after conversion
for first five year of commercial production.
Further to compensate for the higher cost of
conversion of FO/LHS based units to gas,
ANNUAL REPORT 27
the scheme for capital assistance to these
units has also been agreed to under New
Pricing Scheme Stage-III.
The 4 FO/LHS based units have already
started work on conversion of units to gas.
The feasibility report has been prepared for
all 4 units and the 'in principle' approval of
Planning Commission has also been
provided for all the four units.
Assured availability of gas is main constraint
for expediting conversion process. The units
are in regular touch with gas suppliers for
confirm commitment towards supply of gas,
after which conversion process will be
expedited. To encourage the conversion of
existing Fuel Oil/Low Sulphur Heavy Stock
(FO/LSHS) based urea units to gas. The
Department of Fertilizers has notified on 6th
March, 2009, the policy for conversion and
restart of existing urea units to increase
indigenous production and also efficiency in
production of fertilizers. The policy provides
f o r a S p e c i a l F i x e d C o s t t o w a r d s
reimbursement of the cost of conversion to
the urea unit after its conversion to gas is
6.9.7 RECOVERY OF THE INCIDENCE OF NON-
REIMBURSABLE INPUT TAXATION
LEVIED BY STATE GOVERNMENTS FROM
TIME TO TIME IN SUBSIDY REGIME
Under the New Pricing Scheme (NPS) for
urea policy, additional VAT is not considered
for reimbursement. Therefore there is no
provision for reimbursement of additional VAT
levied by State Government in subsidy.
Department of Fertilizers has submitted a
p r o p o s a l o n 11 t h
J a n u a r y 2 0 11 f o r
consideration of the Cabinet Committee on
Economic Affairs (CCEA) to resolve the long
pending issue of non-reimbursable input
taxation levied by the State Government. It
has been proposed to allow the companies to
recover the incidence of non-reimbursable
State levies under subsidy regime, from the
sale of subsidized Urea within that State in
the form of additional cost over and above the
MRP. The CCEA in its meeting held on 03-
03-2011 has approved the above proposal
projects in the CCEA Note. Department of
Fertilizers has implemented the decision of
CCEA and notification issued vide letter No.
completed. The conversion of these units will 12014/4/2009-FPP, dated 29th
March 2011
lead to increase in efficiency of urea and dated 31st
March 2011. Under this production in the country and also add to
usage of natural gas, which is the most
efficient and cleaner fuel/feedstock for
p r o d u c t i o n o f u r e a i n t h e c o u n t r y.
The policy also approved a special
dispensation under New Pricing Scheme,
Stage-III, to enable restart of production of
urea from the Trombay-V unit of M/s
Rashtriya Chemical Limited which has
remained closed for last more than 4 years.
The restart of RCF Trombay will add to
indigenous production of urea and reduce
import dependence towards meeting the
requirement of urea in the country. Besides,
the policy has provision to restart of existing
Naphtha based units which are under
shutdown, on naphtha, provided they convert
to gas before March, 2010, as is necessary
for other operational Naphtha based units.
scheme, the urea units are allowed to recover
additional incidence of non-reimbursable
taxes on the urea sold in the States levying
additional VAT by levying additional MRP in
these States and deposit the same with
Government. Thereafter, the same will be
redistributed on quarterly basis to the
concerned urea producing units. As regards
the impact of non-reimbursed additional
taxation for the period from 1-10-2006 to 31-
03-2011, the fertilizer companies have to
intimate to Department of Fertilizers, the
amount of ACTN (Additional Cost due to Non-
Recognized input taxation) due to additional
VAT, levied by the State Governments for
urea sold in the States from 1-10-2006 to 31-
03-2011. The Government will take up the
matter with concerned State Governments
for reimbursement.
28 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
6.10 CONCESSION SCHEME AND NUTRIENT
BASED SUBSIDY POLICY (NBS) FOR
D E C O N T R O L L E D P H O S P H AT I C &
POTASSIC (P&K) FERTILIZERS
6.10.1. C O N C E S S I O N S C H E M E F O R T H E
D E C O N T R O L L E D P H O S P H AT I C &
POTASSIC FERTILIZERS:
Government of India decontrolled Phosphatic
and Potassic (P&K) fertilizers with effect from
25th
August 1992 on the recommendations of
Joint Parliamentary Committee. Consequent
upon the decontrol, the prices of the P&K
fertilizers registered a sharp increase in the
market, which exercised an adverse impact
on the demand and consumption of the same.
It led to an imbalance in the usage of the
nutrients of N, P & K (Nitrogen, Phosphate
and Potash) and the productivity of the soil.
Keeping in view the adverse impact of the
decontrol of the P&K fertilizers, Department
of Agriculture & Cooperation introduced
Concession Scheme for decontrolled
Phosphatic & Potassic (P&K) fertilizers on
ad-hoc basis w.e.f. 1.10.1992, which has
been allowed to continue by the Government
of India upto 31.3.2010 with changed
parameters from time to time.
T h e b a s i c p u r p o s e / o b j e c t i v e o f t h e
Concession Scheme for P&K fertilizers has
been to provide P&K fertilizers to the farmers
at affordable prices so as to increase the food
productivity in the country through balanced
use of fertilizers. The concession scheme
was also aimed at ensuring reasonable rate
of return on the investments made by the
entrepreneurs in the fertilizer sector.
Initially, the ad-hoc Concession Scheme was
applicable on DAP, MOP, NPK Complex
fertilizers. This scheme was also extended to
SSP from 1993-94. Concession was
disbursed to the manufacturers/importers by
the State Governments during 1992-93 and
1993-94 based on the grants provided by
Department of Agriculture & Cooperation.
Subsequently, DAC started releasing
payment of concession to the fertilizer
companies based on the certificate of sales
issued by the State Governments. During
1997-98, Department of Agriculture &
Cooperation also started indicating an all
India uniform Maximum Retail Price (MRP)
for DAP/NPK/MOP. The responsibility of
indicating MRP in respect of SSP rested with
the State Governments. The Special Freight
Subsidy Reimbursement Scheme was also
introduced in 1997 for supply of fertilizers in
the difficult areas of J&K and North-eastern
States, which continued upto 31.3.2008.
Based on the cost price study of DAP and
MOP conducted by Bureau of Industrial
Costs & Prices (BICP - now called Tariff
Commission), Department of Agriculture &
Cooperation announced rates of concession
based on the cost plus approach on quarterly
basis w.e.f. 1.4.1999. The total delivered cost
of fertilizers being invariably higher than the
MRP indicated by the Government, the
difference in the delivered price of fertilizers
at the farm gate and the MRP was
compensated by the Government as subsidy
to the manufacturers/importers. The
administration of the scheme was transferred
f r o m D e p a r t m e n t o f A g r i c u l t u r e &
Cooperation to Department of Fertilizers
w. e . f . 1 . 1 0 . 2 0 0 0 . T h e G o v e r n m e n t
introduced a new methodology for working
out subsidy to complex fertilizers w.e.f.
1.4.2002 based on the recommendations of
the Tariff Commission. The complex
manufacturers were divided into groups
based on feedstock for sourcing Nitrogen,
such as gas, naphtha, imported ammonia.
With the passage of time, the structure of
DAP industry also changed as some of the
new DAP manufacturing plants were
established using the Rock Phosphate for
manufacturing indigenous Phosphoric
acid/DAP. Accordingly, the Tariff Commission
made a fresh Cost Price Study and submitted
its report in February 2003. Payment of
ANNUAL REPORT 29
concession to the DAP manufacturing units
from 2003-04 to 2007-08 was made as per
two groups depending upon the source of the
raw materials (Rock Phosphate/Phosphoric
acid). Based on the decisions of the
Government in 2004-05, Department of
Fertilizers framed a proposal suggesting
methodology to link phosphoric acid price
with international DAP price. Subsequently,
the matter was referred to the Expert Group.
The Expert Group under Prof. Abhijit Sen,
submitted its report in October 2005. The
recommendations of the Expert Group were
considered by an Inter-Ministerial Group
(IMG). Tariff Commission conducted fresh
cost price study of DAP/MOP and NPK
complexes and submitted its report in
December 2007. Based on the examination
of the Tariff Commission Report and the long-
term approach suggested by the Expert
Group under the Chairmanship of Prof. Abhijit
Sen, the Government approved the
Concession Scheme with effect from
1.4.2008 for DAP/MOP/NPK Complexes
/MAP, which continued upto 31.3.2010 with
certain modifications. The final rates of
concession were worked out on monthly
basis. Concession for indigenous DAP was
the same as that of imported DAP (on the
basis of import parity price). Concession on
complex fertilizers was based on the
methodology recommended by Tariff
Commission with certain modifications. The
NPK complex industry was divided into 4
groups, depending upon the source of
Nitrogen, vis-à-vis, Group-I (Natural Gas),
Group-II (naphtha), Group-III (imported Urea-
ammonia mixture) and Group-IV (imported
Ammonia). A separate cost of 'S' for Sulphur
c o n t a i n i n g c o m p l e x f e r t i l i z e r s w a s
recognized w.e.f. 1.4.2008.
The input/fertilizer prices for Concession
Scheme ware derived on the basis of an
outlier methodology. The Buffer Stocking
Scheme was allowed to continue with 3.5
LMTs for DAP and 1 LMTs for MOP as buffer.
The MRPs of the P&K fertilizers, which had
been indicated by the Government/State
Government, had been constant since 2002
till 31.3.2010. The MRPs of the NPK
complexes were reduced w.e.f. 18.6.2008
which was based on nutrient content. In order
to enhance the basket of fertilizers in the
Concession Scheme, Mono-Ammonium
Phosphate (MAP) was included into the
Concession Scheme w.e.f. 1.4.2007, Triple
Super Phosphate (TSP) was inducted into
the Concession Scheme w.e.f. 1.4.2008 and
Ammonium Sulphate (AS) manufactured by
M/s FACT and M/s GSFC was inducted w.e.f.
1.7.2008.
6.10.2 CONCESSION SCHEME FOR SINGLE
SUPER PHOSPHATE (SSP)
SSP, a popular Phosphatic fertilizers, is a
source of not only phosphate and sulphur but
also calcium. SSP contains 16% P2O5, 11%
S and 16% Ca. SSP is agronomically suitable
for dry land oil seeds crop. After decontrol of
P&K fertilizers, Concession Scheme for SSP
was introduced w.e.f. 1993-94, which
continued on ad-hoc basis for concession
upto 30.4.2008.
Based on the report of the Cost Accounts
Branch (CAB) 2004, the Government vide its
notification dated 25.8.2008 revised the
Concession Scheme for SSP w.e.f. 1.5.2008,
which was continued upto 30.9.2009. As per
this policy, Department of Fertilizers
announced All India MRP at Rs. 3400 PMT in
place of the earlier system of indicating MRP
by each State. As per the policy-dated
25.8.2008, the concession rates were
announced month-wise separately for SSP
produced on the use of imported Rock
Phosphate and on indigenous Rock
Phosphate. The Concession rate of SSP was
escalated/de-escalated based on the rise/fall
of the prices of the raw materials of Rock
30 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
Phosphate, Sulphur and also the exchange
rate. The rates of concession for SSP from
May 2008 to October 2009 were as under:
Month/year Rates of Concession based on Imported Rock Phosphate (Rs. PMT)
Rates of Concession based on Indigenous Rock Phosphate (Rs. PMT)
May, 2008 6406 4587 June, 2008 8942 5383 July, 2008 9160 5674 August, 2008 10391 6776 September, 2008 11661 6990 October, 2008 13003 5823 November,2008 7914 3070 December, 2008 8965 2012 January, 2009 8075 1967 February, 2009 7503 1961 March, 2009 5870 1944 April, 2009 2927 1873 May, 2009 2709 2006 June, 2009 2453 1982 July, 2009 2510 1986 August 2009 1951 2331 September 2009 2251 2295
Then, DOF announced further revised policy
on 13.8.2009 w.e.f. 1.10.2009, which
continued upto 30.4.2010. As per this policy,
the Government decided to leave the selling
price of SSP open w.e.f. 1.10.2009 instead of
the earlier MRP of Rs. 3400 PMT on all India
basis. The Government provided ad-hoc
concession for an amount of Rs. 2000 PMT
for powdered, granulated and boronated
SSP. As per revised policy dated 13.8.2009,
the manufacturers were required to produce
50% of the annual installed capacity or
40,000 Mts per annum during this period in
order to be eligible for subsidy.
6.10.3 NUTRIENT BASED SUBSIDY POLICY FOR
D E C O N T R O L L E D P H O S P H AT I C &
P O T A S S I C ( P & K ) F E R T I L I Z E R S
INCLUDING SSP
(A) During the implementation of Concession Scheme upto 31.3.2010, it has been experienced that no investment has taken place in last decade, the subsidy outgo
increased exponentially by 530% during 2004 to 2009 with about 90% of the increase due to rise in the international prices of fertilizers & its inputs and constant MPR of fertilizers from the year 2002 onwards, Agricultural productivity did not increase commensurately with the subsidy bill. The marginal response of agricultural productivity to additional fertilizer usage in the country has fallen sharply, leading to near stagnation in agricultural productivity and consequently agricultural production. The unbalanced NPK application, rising multi-nutrient deficiency and lack of application of organic manures leading to reduction in carbon content of the soil, was attributed to the stagnating agricultural productivity. The innovation in fertilizer sector had also suffered, as very few products are introduced by fertilizer companies, since they get outpriced by subsidized fertilizers. The industry has no incentive to focus on farmers leading to poor farm extension services, which were necessary to educate farmers about the modern fertilizer application techniques, soil health and promote soil test based application of soil and crop specific fertilizers.
To consider all the issues relating to agriculture productivity, balanced fertilization and growth of indigenous fertilizer industry, and to overcome the deficiency of concession scheme, a Group of Ministers (GoM) was c o n s t i t u t e d w h i c h r e c o m m e n d e d f o r introduction of Nutrient Based Subsidy (NBS) scheme which to be based on the contents of the nutrients in the subsidized fertilizers. The Hon'ble Finance Minister in its Budget Speech 2009 announced for introduction of Nutrient Based Subsidy Policy for Phosphatic & Potassic fertilizers with the objective of ensuring Nation's food security, improving agricultural productivity and ensuring the balanced application of fertilizers. The Government introduced the Nutrient Based Subsidy (NBS) Policy w.e.f. 1.4.2010 in continuation of the erstwhile Concession Scheme for decontrolled P & K fertilizers (w.e.f. 1.5.2010 for SSP). The details of Nutrient Based Subsidy Policy for the year 2010-11 and 2011-12 are as under:
ANNUAL REPORT 31
(I) NBS is applicable for Di-Ammonium
Phosphate (DAP, 18-46-0), Muriate of
P o t a s h ( M O P ) , M o n o A m m o n i u m
Phosphate (MAP, 11-52-0), Triple Super
Phosphate (TSP, 0-46-0), 12 grades of
complex fertilizers and Ammonium
Sulphate (AS - (Caprolactum grade by
GSFC and FACT), which were covered
under the earlier Concession Scheme for
Phosphatic and Potassic (P&K) fertilizers
up to 31st
March 2010 and Single Super
Phosphate (SSP). Primary nutrients,
namely Nitrogen 'N', Phosphate 'P' and
Potash 'K' and nutrient Sulphur 'S'
contained in the fertilizers mentioned
above are eligible for NBS. At present, 25
grades of P&K fertilizers are covered
under the NBS scheme. List of these
fertilizers is at para (C) below.
(ii) Any variant of the fertilizers mentioned
above with secondary and micronutrients
(except Sulphur 'S'), as provided for
under FCO, is also eligible for subsidy.
The secondary and micro-nutrients
(except 'S') in such fertilizers attracts a
separate per tonne subsidy to encourage
their application along with primary
nutrients.
(iii) An Inter-Ministerial Committee (IMC) has b e e n c o n s t i t u t e d w i t h S e c r e t a r y (Fertilizers) as Chairperson and Joint Secretary level representatives of Department of Agriculture & Cooperation (DAC), Department of Expenditure (DOE), Planning Commission and Department of Agricultural Research and Education (DARE). This Committee recommends per nutrient subsidy for 'N', 'P', 'K' and 'S' before the start of the financial year for decision by the Government (Department of Fertilizers). The IMC also recommends a per tonne additional subsidy on fortified subsidized fertilizers carrying secondary (other than 'S') and micro- nutrients. The Committee considers and recommends inclusion of new fertilizers under the subsidy regime based on application of manufacturers/ importers and its need appraisal by the
Indian Council for Agricultural Research (ICAR), for decision by the Government.
(iv) As per the Government decision, NBS rates are to be announced on annual basis on each nutrient namely, 'N', 'P', 'K' and 'S' based on the recommendation of IMC.
(v) Distribution and movement of fertilizers along with import of finished fertilizers, fertilizer inputs and production by indigenous units continues to be monitored through the online web based “Fertilizer Monitoring System (FMS)” as b e i n g d o n e u n d e r t h e o u t g o i n g Concession Scheme for P&K fertilizers.
(vi) 20% of the price decontrolled fertilizers produced/imported in India is now in the movement control under the Essential C o m m o d i t i e s A c t 1 9 5 5 ( E C A ) . Department of Fertilizers will regulate the movement of these fertilizers to bridge the supplies in under-served areas.
(vii) In addition to NBS, freight for the movement and distribution of the decontrolled fertilizers by rail and road is being provided to enable wider availability of fertilizers in the country.
(viii) Import of all the subsidized P&K fertilizers, including complex fertilizers have been placed under Open General License (OGL). Earlier, no concession was available for imported complex fertilizers. Now, NBS is available for imported complex fertilizers also. However, in case of Ammonium Sulphate (AS), as NBS is applicable only if it is produced by M/s FACT and M/s GSFC.
(ix) Though the market price of subsidized
fertilizers, except Urea, is determined
based on demand-supply balance, the
fertilizer companies are required to print
Maximum Retail Price (MRP) along with
applicable subsidy on the fertilizer bags
clearly. Any sale above the printed net
MRP is punishable under the Essential
Commodities (EC) Act.
32 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
NBS rates (Rs. per MT)
Sl. No.
Fertilizer Grades(FG) (N P K S nutrient)
2010-11
2011-12
1st Apr to 31st Dec 2010
1st Jan to 31st Mar 2011
FG already under CS carried under NBS w.e.f. 1.4.2010 1. DAP (18-46-0-0) 16268 15968 19763
2. MAP (11-52-0-0) (w.e.f. 1.4.2007) 16219 15897 19803
3. TSP (0-46-0-0 (w.e.f. 1.4.2008) 12087 11787 14875
4. MOP (0-0-60-0) 14692 14392 16054 5. SSP (0-16-0-11) 4400 4296+200 5359 6. 16-20-0-13 9203 9073 11030 7. 20-20-0-13 10133 10002 12116 8. 20-20-0-0 9901 9770 11898 9. 23-23-0-0 11386 11236 13686 10. 28-28-0-0 13861 11678 16657 11. 10-26-26-0 15521 15222 18080 12. 12-32-16-0 15114 14825 17887 13. 14-28-14-0 14037 13785 16602 14. 14-35-14-0 15877 15578 18866 15. 15-15-15-0 11099 10926 12937 16. 17-17-17-0 12578 12383 14662 17. 19-19-19-0 14058 13839 16387
18.
Ammonium Sulphate (20.6-0-0-23) (w.e.f. 1.7.2008)
5195
5195
5979
New fertilizers included under NBS after 1.4.2010
19. 16-16-16-0 (w.e.f. 1.7.2010) 11838 11654 13800
20. 15-15-15-9 (w.e.f. 1.10.2010) 11259 11086 13088
21. 24-24-0-0 (w.e.f. 1.10.2010) 11881 11724 14278
22. DAP Lite(16-44-0-0) (w.e.f. 1.2. 2011) ------- 14991 18573
23.
DAP Lite Grade (II) (14-46-0-0) (for one year w.e.f.. 30.8.2011 to 30.8.2012)
-------
-------
18677
24.
MAP Lite (11-44-0-0) (for one year w.e.f.. 30.8.2011 to 30.8.2012
-----
------
17276
25.
13-33-0-6 (for one year w.e.f.. 30.8.2011 to 30.8.2012)
-----
-------
14302
(x) Manufacturers of customized fertilizers
and mixture fertilizers are eligible to
source subsidized fertilizers from the
manufacturers/ importers after their
receipt in the districts as inputs for
manufacturing customized fertilizers and
mixture fertilizers for agricultural purpose.
There is no separate subsidy on sale of
customized fertilizers and mixture
fertilizers.
(xi) A separate additional subsidy is provided
t o t h e i n d i g e n o u s m a n u f a c t u r e r s
producing complex fertilizers using
Naphtha based captive Ammonia to
compensate for the higher cost of
production of 'N'. However, this will be for
a maximum period of two years during
which the units will have to convert to gas
or use imported Ammonia. The quantum
of additional subsidy will be finalized by
Department of Fertilizers in consultation
w i t h D O E , b a s e d o n s t u d y a n d
r e c o m m e n d a t i o n s b y t h e Ta r i f f
Commission.
(xii) The NBS is being released through the
industry during the first phase. The
payment of NBS to the manufacturers
/ i m p o r t e r s o f D A P / M O P / C o m p l e x
Fertilizers/ MAP/TSP, SSP and AS is
released as per the procedure notified by
the Department.
NBS rates (Rs. per Kg) Nutrients 1st Apr -
31st Dec
2010 *
1st Jan-
31st Mar
2011**
2011-12
„N‟ (Nitrogen) 23.227 23.227 27.153 „P‟ Phosphate) 26.276 25.624 32.338 „K‟ (Potash) 24.487 23.987 26.756 „S‟ (Sulphur) 1.784 1.784 1.677
* Including Rs. 300/- per MT for secondary freight from rake point to retail points. ** Excluding the secondary freight of Rs. 300/- PMT, which is being paid separately on per
Ton per KM basis.
(C) The Per MT Nutrient Based Subsidy
during 2010-11 and 2011-12 is as follows:
(B) Nutrient Based Subsidy Per Kilogram of
Nutrients
Based on the recommendations of the Inter
Ministerial Committee constituted under the
N u tri e n t Ba se d Su b si d y Po l i cy, th e
Government has allowed the per Kg NBS for
'N', 'P', 'K' & 'S' (Nitrogen, Phosphate, Potash
and Sulphur) and the amount of subsidy per
MT on the Phosphatic & Potassic fertilizers
for 2010-11 and 2011-12 is as follows:
ANNUAL REPORT 33
(D) Subsidy for fortified fertilizers
Per MT additional subsidy for fortified
fertilizers with secondary and micro-nutrients
as per FCO has also been allowed by
Department during 2010-11 and 2011-12
under NBS as follows:
Sl. No.
Nutrients for fortification as per FCO
Additional subsidy per MT of fortified fertilizers (in Rs. PMT)
1. Boron „B‟ 300
2. Zinc „Zn‟ 500
(E) Department of Fertilizers has also provided the
following amount of separate additional subsidy
to the indigenous manufacturers producing
complex fertilizers using Naphtha/Fuel Oil based
captive Ammonia to compensate for their higher
cost of production of 'N' subject to final
recommendation of the Tariff Commission. This
compensation is allowed for a maximum period of
two years (w.e.f. 1.4.2010 to 31.3.2012) during
which the units will have to convert to gas or use
imported Ammonia.
Name of the company
Grades of Fertilizers
Amount (Rs. PMT) of additional compensation (Provisional)
FACT(Cochin)
20-20-0-13 (APS) (Udyogmandal and Cochin)
3121
Ammonium Sulphate (20.6-0-0-13) (Udyogmandal)
3658
MFL, Manali 20-20-0-13 (APS) 5434 17-17-17-0 4640
GNVFC, Bharuch
20-20-0-0(ANP) 2534
(F) Procedure for Payment of subsidy under
NBS
Department of Fertilizers releases 85% (90%
with Bank Guarantee) 'On Account' payment
o f s u b s i d y m o n t h - w i s e t o t h e
manufacturers/importers of P&K fertilizers
(SSP) based on receipt of fertilizers in the
d i s t r i c t s / S t a t e s . T h e m a n u f a c t u r e r s / I
mporters claim the 'On Account' payment in
prescribed Proforma 'A' duly certified by the
authorized signatory as well as the statutory
auditor of the company. The balance
payment of subsidy is also claimed by the
fertilizer companies based on information in
prescribed Proforma 'D' duly certified by the
authorized signatory as well as the statutory
auditor of the company. The State
Governments are required to submit
certificate to DOF in receipt of the fertilizers in
prescribed Proforma 'B'. The payment of
subsidy to SSP is released on sales basis.
Accordingly, the eligible units are allowed to
claim 85% 'On Account' payment of subsidy
based on the information in respect of sale of
SSP duly certified by the authorized
signatory as well as the statutory auditor of
the company. The balance payment is
released by DOF based on the certification of
sales issued by the State Governments in
prescribed Proforma 'B'. At present, 46
manufacturers/importers of P&K fertilizers
and 84 SSP manufacturers are covered
under the Nutrient Based Subsidy Policy.
(G) Freight subsidy Policy for distribution/
movement of fertilizers
With effect from 1.4.2008, Uniform Freight
Policy (UFP) for all subsidized fertilizes was
announced by the Department on 17.7.2008.
As per this policy, freight for distribution of
P&K fertilizers (except SSP) became
reimbursable on the basis of actual Rail
Freight as per Railway Receipt for Rail
Movement (Primary Movement) and on the
basis of average district lead (average leads
from the nearest rake point to block
headquarters) and provisional per KM per
MT road movement (secondary movement)
from the nearest rake point to the various
retail points. For direct road movement from
manufacturing units/ports to retail points,
freight was reimbursable on the basis of
provisional per KM per MT rate.
The UFP for P&K fertilizers (except SSP)
announced by the Department was
34 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
applicable from 1.4.2008 to 31.3.2010. As
per this policy, the secondary fright to P&K
fertilizers (except SSP) was given as per UFP
as applicable to Urea.
W.e.f. 1.4.2010 to 31.12.2010, UFP
applicable upto 31.3.2010 was done away
with for P&K fertilizers while it continued for
Urea. Instead, freight subsidy on subsidized
fertilizers (except SSP) was restricted to the
rail freight. The road freight was assumed to
be part of the fixed subsidy and the retail
prices. Accordingly, the road freight was
merged in subsidy by adding lump sum Rs.
300 per MT in the computation of subsidy
rates of DAP and MOP. The freight subsidy
on P&K fertilizers (except SSP) was
announced on 19.4.2010 according to which
freight subsidy on P&K fertilizers (except
SSP) for rail movement would be as per
actual expenditure as per Railway Receipt
and for direct road movement, it would be
subject to actual expenditure or equivalent
rail freight, whichever is lower. For the
purpose of admissibility of equivalent rail
freight for direct road movement, the
following rates were applicable:
Movement(K.M.) Rates Rs. per MT
Upto 100 108
101-200 183
201-300 256
301-400 327
401-500 400
W.e.f. 1.1.2011, freight subsidy for P&K
fertilizers (except SSP) was revised as
under:
(a) Freight subsidy for rail movement would be
paid as per actual claim;
(b) Secondary freight for P&K fertilizers (except
SSP) will be paid as per UFP as applicable for
Urea;
(c) Freight for direct movement would be subject
to lower of actual expenditure and equivalent
rail freight. Direct road movement will be
allowed to a maximum distance of 500 KM.
for the purpose of admissibility of equivalent
rail freight for direct road movement the
above mentioned slabs were applicable.
(H) Impact of Nutrient Based Subsidy
(i) Maximum Retail Price (MRP) of fertilizers
under Nutrient Based Subsidy Policy
Prior to 1.4.2010, i.e., before the introduction
of NBS Policy, the MRPs of the P&K fertilizers
were fixed by the Government of India at
below the actual cost of the P&K fertilizers
and the difference between the actual cost
and the MRPs was reimbursed by the
Government to the manufacturers/importers
in the form of subsidy. Under the NBS Policy
w.e.f. 1.4.2010, the MRPs of the P&K
fertilizers have been left open and the
manufacturers/importers/marketers are
allowed to fix the MRP of P&K fertilizers at
reasonable level. As our country is fully
dependent on imports for Potassic (K)
fertilizers and to the extent of 90% in
Phosphatic (P) fertilizers, any rise or fall in
international prices of P&K fertilizers and
fertilizer inputs has direct bearing on the
prices of fertilizers.
D u r i n g t h e f i r s t y e a r ( 2 0 1 0 - 11 ) o f
implementation of NBS policy, the MRP of
P&K fertilizers was registered an increase of
Rs. 30 per bag( 50Kg) . The MRP of SSP was
reduced by Rs. 70 per bag. In the year 2011-
12, due to the increase in the international
prices of the finished/ intermediate/raw
materials of P&K fertilizers, the MPRs of P&K
fertilizer has registered sharp increase due to
which the farmers may not be able to avail the
benefit of the price which was enjoyed by
them earlier under the concession scheme,
as the increase in international prices was
earlier absorbed by the Government.
However, the farmers are still paying
approximately 50% of the delivered cost of
the P&K fertilizers and the rest of the cost is
ANNUAL REPORT 35
Fertilizer grades (N-P-K-S nutrient)
Included in NBS with effect from
Reasons for inclusion
Inclusion of new fertilizers under the NBS were based on the principle of diversification of sources of nutrients particularly to reduce dependence on DAP and other such fertilizers as main source of „P‟. Inclusion of these fertilizers is expected to bridge the gap between requirement and availability of P&K fertilizers.
1 16-16-16-0 1.7.2010
2 24-24-0-0 1.10.2010
3 15-15-15-9 1.10.2010
4 DAP Lite (16-44-0-0)
1.2.2011
5 DAP Lite grade-II (14-46-0-0)
30.8.2011 (valid for one year)
6 MAP Lite (11-44-0-0) -do-
7 13-33-0-6 -do-
borne by the Government of India in the form
of subsidy.
(ii) Inclusion of new fertilizers under the
NBS Policy
In the initial year of implementation of NBS
Policy (2010-11), there were 18 grades of
fertilizers under the NBS policy. Thereafter,
with the objective of providing a variety of
subsidized fertilizers to the farmers
depending upon the requirement of the soil
and crops, the Government has included the
following 7 new grades of NPKS complex
fertilizers under the NBS regime.
It is expected that the farmers shall be able to
purchase the desired quantity of fertilizers
and may choose the fertilizers of his choice
depending upon the soil specific/crop
specific/season specific requirement.
6.10.4 SUBSIDY RELEASED
The amount of subsidy provided by the
Government during 2001-02 was Rs. 12695.02
crore, which has increased upto Rs. 99494.71
crore in 2008-09. It was decreased to Rs.
65836.68 crore during 2010-11. Actual
expenditure on subsidy , as on 28.2.2012, is Rs
66060.82 crore. The budget estimate for
fertilizer subsidy for 2012-13 is Rs. 65592.13
crore. The statement showing subsidy released
by the DOF on Urea and P&K fertilizer is at
Annexure-X.
6.10.5 C O S T P R I C E S T U D Y B Y TA R I F F COMMISSION
In order to update/finalize provisional rates of
subsidy for Ammonium Sulphate and
Naphtha based NPK complex fertilizer, Tariff
Commission has been requested to
undertake Cost Price Study and give its
recommendations. The report of the Tariff
Commission on the above issues has been
r e c e i v e d a n d t h e s a m e i s u n d e r
consideration in the Department.
6.10.6 QUALITY OF FERTILIZERS
Government of India has declared fertilizer as
an essential commodity under the Essential
Commodities Act, 1955 (ECA) and has
notified Fertilizer Control Order, 1985 (FCO)
under this Act. Accordingly, it is the
responsibility of the State Governments to
ensure the supply of quality of fertilizers by
the manufacturers/importers of fertilizers as
prescribed under the FCO under the ECA.
As per the provision of the FCO, the
fertilizers, which meet the standard of quality
laid down in the order can only be sold to the
farmers. There are 71 fertilizer testing
laboratories including four laboratories of the
Government of India at Faridabad, Kalyani,
Mumbai and Chennai with an annual
analyzing capacity of 1.34 lakh samples. The
quality of the fertilizers imported in the
36 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
Country is invariably checked by the fertilizer
q u a l i t y c o n t r o l l a b o r a t o r i e s o f t h e
G o v e r n m e n t o f I n d i a . T h e S t a t e
Governments are adequately empowered to
draw samples of the fertilizers anywhere in
the Country and take appropriate action
against the sellers of Non- Standard
fertilizers. The penal provision includes
prosecution of offenders and sentence if
convicted up to seven years imprisonment
under the ECA, 1955 besides cancellation of
a u t h o r i z a t i o n c e r t i f i c a t e a n d o t h e r
administrative action. The Department of
Fertilizers make deductions alongwith penal
interest on the quantity of the fertilizers for
which the State Governments have reported
to be Non- Standard. During the year 2006-
07, 2007-08 and 2008-09, the percentage of
samples of fertilizers declared Non- Standard
at all India level were 6.0%, 6.2% and 5.5%
respectively. Payment of concession for P&K
fertilizers and for Single Super Phosphate
(SSP) is made by the Department taking into
account the certificate of quality given by the
respective State Governments in Proforma
'B' for the fertilizers received and sold in the
State. Further, SSP units are required to
produce month-wise 'Quality Certificates'
issued by the State Governments of the State
in which the units are located. The units are
required to have well equipped laboratory to
test the sample of its SSP. The SSP units are
also required to print 'Quality Certified' on
each bag released in the market. DOF also
deputes PDIL to conduct first time technical
inspection of the new SSP units. PDIL
conducts six monthly inspections of the SSP
units to check the quantity and quality of the
fertilizers for which the units are claiming
payment of subsidy. The units are also
required to use only those grades of Rock
Phosphate as inputs for manufacturing SSP
under the NBS, which are notified by DOF
from time to time. A statement showing the
notified grades is at Annexure-XI. DOF has
also asked the State Government to
constitute teams with that of PDIL to test
samples of Single Super Phosphate (SSP) at
the retailer level. The marketers of the SSP
are also responsible for he quality of the
fertilizer marketed by them. Department of
Fertilizers has also constituted vigilance
teams of the Officers of the Department to
check the availability and quality of the
fertilizers in the States.
6.10.7 R E S T R I C T I O N O N E X P O R T O F
FERTILIZER
The Government has received complaints of
smuggling of subsidized fertilizers to the
neighboring countries. Keeping in view the
availability of the fertilizers in the country and
the subsidy paid thereon, in addition to urea,
the Government has decided to put the
export of DAP/MOP in the restrictive category
in order to discourage the exports and
smuggling. The DGFT has been requested to
place all other subsidized fertilizers also in
the restricted category.
*****
ANNUAL REPORT 37
CHAPTER -7
PUBLIC SECTOR UNDERTAKINGS
There are nine Public Enterprises under the
administrative control of the Department. A
statement indicating profitability of these
organizations has been given at Annexure-XII
7.1 FCI ARAVALI GYPSUM & MINERALS
INDIA LIMITED (FAGMIL)
7.1.1 Introduction
The FCI Aravali Gypsum and Minerals India
Limited was incorporated under the
Companies Act, 1956 as a Public Sector
Undertaking on 14.02.2003 after being hived
off the Jodhpur Mining Organization (JMO) of
Fertilizer Corporation of India Ltd. (FCIL).
The authorized share capital of the Company
is Rs.10 Crore and the paid up capital is Rs.
7.33 Crore as on 31-03-2011.
7.1.2 Production Performance
During the year 2010-11, the company has
produced 8.84 LMT of Gypsum, utilizing its
97% capacity. In the current year 2011-12
(Up to December 2011), Company has
produced 3.85 LMT of Gypsum against the
targeted annual production of 9.05 LMT. Due
to non-clearance of mining leases from the
State Government, company is facing
problem in achieving target.
7.1.3 Financial Performance
During the year 2010-11, Company has
registered a profit (after tax) of Rs. 24.05
Crore (including the Minimum Alternative Tax
entitlement of Rs. 11.82 crore) in the year.
Company paid a dividend of Rs. 245.55 lakh
@ Rs. 3.35 per share of Rs. 10/- each. In the
current year 2011-12 ( up to Dec. 2011), the
provisional profit (before tax) of the company
is Rs. 8.21 crore.
7.1.4 Grievance Cell
Grievance Cell is functioning to redress the
public and staff grievances and no grievance
is pending as on date.
(I) For Public grievance
Head Office at Jodhpur receives the
public grievances, which are redressed
by the Grievance Cell. At present, no
grievance is pending.
(ii) For Staff Grievance
1. The employees who are working in
various Mines are advised to submit
t h e i r g r i e v a n c e s t h r o u g h t h e
respective Area Managers to General
Manager.
2. The employees working at Head
O f f i c e , J o d h p u r, r o u t e t h e i r
grievances through Sectional Heads
to General Manager. At present, no
grievance is pending.
7.1.5 Employment of SC/ST, Ex-servicemen,
P h y s i c a l l y H a n d i c a p p e d & O t h e r
Backward Classes (OBCs) persons.
Company has total man-power of 86 as on
31.3.2011, 14 belong to scheduled caste, 4 to
scheduled tribes, and 7 to OBCs categories.
7.1.6 Corporate Social Responsibility (CSR)
FAGMIL has earmarked 2% of its profits
before tax for providing assistance for public
health and medical relief, education etc. and
accordingly made a provision of Rs. 39.79
lakh (previous year Rs.31.75 lakh) in the
books of accounts during the year 2010-11.
The Company has installed a mobile soil
testing van for testing the soil of villages near
by its mines to make the farmers aware about
38 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
the type of crops which could be shown in that
climatic conditions and for that what type of
fertilizers are required.
7.2 BRAHMAPUTRA VALLEY FERTILIAZER
CORPORATION LIMITED (BVFCL)
7.2.1 Introduction
Brahmaputra Valley Fertilizer Corporation
L i m i t e d ( B V F C L ) w a s f o r m e d a f t e r
segregation of Namrup Units in Assam from
Hindustan Fertilizer Corporation Ltd. w.e.f.
1.04.2002. The Namrup complex of BVFCL
comprise of three separate units designated
as Namrup-I, Namrup-II and Namrup-III.
Presently only Namrup-II and Namrup-III are
in operation.
The Corporate Office of the company is
s i t u a t e d a t N a m r u p . T h e o t h e r
establishments of the company are Liaison
Offices at NOIDA & Kolkata and Marketing
Offices at Guwahati, Siliguri & Patna. The
authorized share capital and paid up capital of
the company as on 31.03.2011 were Rs. 510
Crores and Rs. 365.83 Crores respectively.
7.2.2 Physical Performance
During the year 2010-11, Company has
produced 2.85 LMT of Urea, utilizing its
55.91% capacity. In the current year 2011-12
( upto Dec. 2011), the actual production of
urea is 2.01 LMT. The targeted (RE)
production for the year 2011-12 is 3,18,021
MT of Urea. The Company is operating its
Namrup-II Unit with 50% load due to limitation
in availability of Natural gas and obsolete
technology. Similarly its Namrup–III plant has
restricted the load due to low conversion in
synthesis converter in Ammonia III.
7.2.3 Financial Performance
During the year 2010-11 Company incurred
net loss of Rs. 85.09 crore. However the
operating profit of the company was Rs. 30.36
crore. In the current year 2011-12 ( upto Dec.
2011, the estimated loss is Rs. 71.28 crore.
7.2.4. Measures taken for Financial Restruc-
turing of the Company
Company had appointed M/s. Haldor Topsoe
as Process Licensor for comprehensive study
of Ammonia plants and M/s PDIL for Urea
plant and offsites/utilities, situated at
Namrup-II and Namrup III plant. After a
thorough study at the existing Namrup-II and
Namrup-III plants, Process licensor have
submitted their reports to the company.
Based on the technical study report of
Process Licensor, BVFCL has submitted a
comprehensive proposal for revival of the
company. The proposal is under examination
in Department of Fertilizers.
7.2.5 Public/Staff grievance redressal mach-
inery and Status of Grievances
A Grievance Redressal Committee chaired
by an Officer of the level of Dy. General
Manager in place for redressal of grievances
of the staff. Numbers of Grievance Boxes are
placed in different places within and outside
the precinct of the factory.
For addressing the problems relating to
harassment of women employees, a
committee headed by a lady officer is
constituted.
7.2.6 Employment of SC/ST, Ex-Servicemen,
P h y s i c a l l y H a n d i c a p p e d & o t h e r
backward classes persons
The matter of employment of persons
belonging to SC/ST, Ex-servicemen,
Physically handicapped & other backward
classes are taken care at the time of
recruitment and promotions, Reservation
policy has been followed as per Government
guidelines.
Out of strength of 1087, there are 86 SCs, 164
STs, 339 OBCs, 3 Ex-servicemen and 3
PHPs on the rolls of the Company.
ANNUAL REPORT 39
7.2.7 Welfare of minorities and reservation in
dealership
Welfare of minorities are well looked after and
directive of Prime Minister's 15 Point
Programme relating to welfare of minorities
are followed during recruitment and
promotion. At the time of promotion and
recruitment, a representative of the minority is
included in the Selection Committee.
In the reservation of dealership, the policy laid
down by the Government of India is being
followed at the time of appointment.
Category-wise details of SC/ST dealers are
as follows:
ST Category: 57
SC Category: 14
Total Dealers: 588
7.3 THE FERTILIZER CORPORATION OF
INDIA LIMITED (FCIL)
7.3.1 Introduction
The Fertilizer Corporation of India Limited
(FCIL) has its units located at Sindri
(Jharkhand), Gorakhpur (Uttar Pradesh),
Ramagundam (Andhra Pradesh) and Talcher
(Orissa). It also has an un-commissioned
project at Korba (Chhattisgarh). Against the
authorized share capital of the Company of
Rs.800 crore, the paid up share capital was
Rs. 750.92 crore as on 31.3.2011.
7.3.2 Reference to BIFR
The Corporation was declared sick in
November, 1992 by the Board for Industrial
and Financial Reconstruction (BIFR).
7.3.3 Closure of the Company
In view of the continuing losses of the
Company, stemming from technical and
financial non-viability of operations, the
Government decided to close down FCI in
September 2002. Consequently, a Voluntary
Separation Scheme (VSS) was offered to all
its 5712 employees. All the employees, who
opted for VSS have since been released,
except 27 employees who are engaged in
discharging statutory obligations, including
safety & security of properties/ assets of the
various units of the Company.
BIFR in their meeting held on 2.4.2004
confirmed their prima facie opinion regarding
winding up of the Company. BIFR vide their
orders dated 17.5.2004 conveyed their
opinion to High Court of Delhi. This reference
was registered as Company Petition (C.P.)
No.183/2004 in the High Court. Pursuant to
the prayer of the Department of Fertilizers
and the Company, the High Court in its
hearing held on 20.8.2010 has remitted the
matter back to BIFR for revival of the fertilizer
units of the Company.
7.3.4 Revival of the Company
Considering the shortage of domestic
production of urea in order to meet its growing
demand in the country and availability of well-
developed infrastructure in the various closed
units of the Company, the Cabinet has
decided in April 2007 to explore the feasibility
of reviving the fertilizer units of Fertilizer
Corporation of India Limited. Subsequently,
the Cabinet constituted and an Empowered
Committee of Secretaries (ECOS) on
30.10.2008 to consider various options of
revival and further approved 'in principle' to
consider waiver of GoI Loan & Interest, in
case of availability of viable fully tied up
revival proposal. After detailed study and
recommendations for a revival option, ECOS
on 24.8.2009 selected a suitable Revival
Model and recommended the same for
seeking the approval of GoI.
Following PSUs have shown interest in the
revival of some Units of the Company:
a. GAIL-RCF-CIL for Talcher Unit
b. EIL-NFL for Ramagundam Unit
c. SAIL-NFL for Sindri Unit
40 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
Considering the above, ECOS in their 4th
meeting held on 4.3.2011 recommended
permitting revival by these PSUs on
nomination basis on offering and Equity
Participation to FCIL by 11% against the
usage of the assets and land of FCIL, subject
to approval of CCEA.
The process of revival and the Draft
R e h a b i l i t a t i o n S c h e m e ( D R S ) , a s
recommended by ECOS, has been
approved by CCEA on 4.8.2011. The
proposal is under consideration of BIFR.
7.3.5 Progress of proceedings before BIFR
Hon'ble BIFR in its hearing held on
12.11.2010 on deliberations of the progress
made :
(i) Appointed State Bank of India as the
Operating Agency;
(ii) Advised the Company/DoF to obtain the
approval of the Cabinet for the proposed
Revival Scheme and suggested that the
waiver of liabilities of FCIL towards CPSUs
and Government agencies through One
Time Settlement (OTS) also be taken up.
Accordingly the proposal for revival of closed
units of FCIL was placed before Cabinet
Committee on Economic Affairs (CCEA).
CCEA in its meeting held on 4.8.2011
approved the same. The BIFR has
considered the revival proposal in the
hearing held on 18.8.2011, 15.11.2011 &
10.1.2012. The operating agency and FCIL
is taking necessary action as per the
direction of BIFR. The next date of BIFR
hearing is scheduled for 29.3.2012.
7.3.6 Financial Results
During the year 2010-11, the Company
incurred a book loss of Rs. 508.09 crore,
which includes Rs. 554.10 crore as interest
on GOI Loan and Rs. 0.29 crore towards
depreciation. In the current year 2011-12
company would incur an approximate loss of
Rs. 554.10 crore.
7.4 MADRAS FERTILIZERS LIMITED (MFL)
7.4.1 Introduction
Madras Fertilizers Limited (MFL) was
incorporated in December 1966 as a Joint
Venture between GOI and AMOCO India
Incorporation of USA (AMOCO) with GOI
holding 51% of the equity share capital. In
the year 1972, NIOC (National Iranian Oil
Company) acquired 50% of the AMOCO's
share and the shareholding become 51%
GOI and 24.5% each of AMOCO and NIOC.
In 1985, AMOCO disinvested their shares,
which were purchased by GOI and NIOC in
their respective proportions on 22.07.1985.
The revised share holding pattern was GOI
67.55% and NIOC 32.45%. Subsequent to
the Issue of Rights shares in 1994 for part
financing the Project, the holding of GOI &
NIOC stands at 69.78% and 30.22%.
During 1997, MFL has gone for Public Issue
of 2, 86, 30,000 shares with face value of Rs.
10 and a premium of Rs. 5 per share. Of
these, 2, 58, 09,700 shares were subscribed.
At present Sector-wise Paid up share capital
and the shareholding pattern are as follows:
Shareholder Rs in Cr %
Govt. of India 95.85 59.50
Naftrian Intertrade
Company Ltd.(NICO),
affiliate of NIOC
41.52 25.77
Public 23.73 14.73
Total 161.10 100.00
Though the Company has an authorized
share capital of Rs. 365 Cr comprising of
Rs.175 Cr as equity and Rs. 190 Cr as
preference share capital, the preference
share capital is yet to be issued and
subscribed. As on 30.11.2011, the paid up
equity was Rs. 161.10 Cr.
ANNUAL REPORT 41
Annual Capacity (MT) Production Details (MT
Pre-Revamp Post-Revamp 2010-11 2011-12 @
Ammonia 2,47,500 3,46,500 2,80,408 2,05,846
Urea 2,92,050 4,86,750 4,78,834 3,55,935
NPK 5,40,000 8,40,000 - 16,835
MFL commenced commercial production in
1971, with an annual installed capacity of 2,
47,500 MT of Ammonia, 2, 92,050 MT of Urea
and 5, 40,000 MT of NPK. A major revamp /
expansion was carried out in 1998 at a cost of
Rs. 601 Cr, enhancing the annual installed
capacity to 3, 46,500 MT of Ammonia,
4,86,750 MT of Urea and 8, 40,000 MT of
NPK. With effect from 01.04.2003, GOI
introduced a New Pricing Scheme I and
adopted Tariff Committee Recommendations
for the Complex fertilizers. In the year 2003-
04, the accumulated loss eroded the total net
worth and therefore the Company was
referred to BIFR. On account of better
production performance and lower energy
consumption in urea operation coupled with
One Time Settlement benefit from Financial
Institutions, the Company's operation for the
financial year 2010-11 ended with a profit of
Rs. 169.86 Cr. During the year 2010-11, the
Company produced 4, 78,834 MT of Urea
with capacity utilization of 98.4%.
7.4.2 Reference to BIFR
The Company has been referred to Board for
Industrial and Financial Reconstruction
(BIFR) on the total erosion of net worth. BIFR
declared the Company as Sick under Section
15 of SICA in its hearing held on April 2, 2009
and appointed State Bank of India
(Commercial Branch, Chennai) as the
Operating Agency (OA) to prepare a Draft
Revival Scheme (DRS).
OA earlier engaged SBI CAPS for preparing
financial rehabilitation proposal and SBI
CAPS accordingly prepared and forwarded
the same to OA and the Company, who in turn
forwarded the report to DOF after obtaining
approval from Board, for further proceedings.
SBICAPS in their report recommended that
Write-off of GOI outstanding principal and
interest appears to be the most suitable
option for the Company to come out of BIFR
with the understanding that GOI would
recommend waiver of the tax incidence
under the option.
The Financial restructuring proposal
prepared by DOF, based on the above
recommendation, was circulated to the stake
holder Ministries. The comments from the
concerned Ministries/Departments have
been received and considered in the DoF.
Department of Expenditure and Planning
Commission have been requested to submit
the fresh comments considering the views of
DoF. Meanwhile BIFR in its hearing held on
25th August 2011 has directed the Operating
Agency (State Bank of India) to workout
financial restructuring of MFL considering the
conversion of GOI loan into equity.
7.4.3 Production Performance
The capacity and production details of MFL are
as follows:
@ up to November 2011
The Company so far produced 355935 MT of
Urea with the capacity utilization of 109.7%
and is hopeful of producing 4,64,401 MT of
Urea with capacity utilization of 95.4%. The
Company is taking Annual Turnaround
during January 2012. The Company
resumed production of NPK Complex
fertilizers on October 20, 2011 where NPK ̀ A'
Train was started and produced 16385 MT of
Vijay 20:20:0:13 till Nov 30, 2011. On receipt
of MOP (Muriat of Potash), Company would
commence production of Vijay 17-17-17.
The Company is hopeful of producing 81,585
MT of NPK Complex during the year 2011-12.
During the year 2011-12, the Company shall
achieve Bio-fertilizer production of 450 MT.
42 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
Program Plan for 2011-12 (NOs.)
Actuals Upto
Nov’11 (NOs.)
Plan for Dec’11
to Mar’12 (NOs.)
Annual
Budget
(in Rs.)
Actuals Upto
Nov’11 (in Rs.)
Soil Sample Collection- Macro Nutrient(NPK)
5500 5070 430
55000
31360
Micro Nutrient 550 427 123 Bio Demo 72 50 22 43200 13131 Bio Special Campaign
11 4 7 55000 15080
Farmers Contacted
71000 55436 15564 - -
Exhibitions 11 - 11 33000 -
7.4.4 Sales Performance
Product
2010-11
Actuals
2011-12
Actuals
Apr-
Nov’11
Projections
Dec’11-
Mar’12
Anticipate
d sales for
2011-12 Vijay Urea(MT) 473782 353767 106233 460000
Vijay Biofertilizers(MT) 452.60 342.32 153.00 495.32
Vijay Neem(KL) 100.34 97.67 22.53 120.20
Vijay Organic(MT) - 2712 1000 3712
7.4.5 Financial Performance
During the year 2010-11, the company earned
a profit of Rs. 169.86 Cr and the total
accumulated loss was brought down to Rs.
617.19 Cr as on 31st
March, 2011 During the
period April –December 2011, the Company
has estimated to earn a profit of Rs. 111.43 Cr.
7.4.6 Information relating to welfare of
Minorities and reservation in Dealership
The company has been following GOI
guidelines on inclusion of representative
from minorities in selection committee for
Recruitment of more than ten candidates.
The Company has network of 5903 dealers.
There are 1614 SC/ST dealers which
represents 27.34%. The SC / ST dealers are
allowed waiver or Security Deposit of Rs.
5,000 and exemption from minimum sales
7.4.8 Efforts and initiatives taken by the PSU for
t h e W e l f a r e , D e v e l o p m e n t a n d
Empowerment of Women and for
mainstreaming gender issues
MFL do not have any problems for
mainstreaming gender issues and all the
women employees are being involved in all
the activities. Further, MFL is having a
separate Women's Forum affiliated to
“Women in Public Sector (WIPS)” and there
is a women coordinator from MFL nominated
for this purpose for coordinating the activities
and promoting the interests of women
employees in their welfare, development
and empowerment. Every year, MFL is
conducting “Women's Day” and almost all the
women employees are participating in the
programme /event. Last year 2010-11, on
March 15, MFL conducted Women's Day in a
grand manner.
7.5 PROJECTS & DEVELOPMENT INDIA
LIMITED (PDIL)
7.5.1 Introduction
Projects & Development India Limited (PDIL)
an erstwhile Division of the Fertilizer
Corporation of India (FCI) was registered as
a separate company in March 1978. The
company has its registered office at Noida,
Uttar Pradesh. Company has been granted
norms. M i n i - r a t n a C a t e g o r y - 1 s t a t u s . T h e
7.4.7 Corporate Social Responsibility
The budget provision towards corporate
social responsibility is detailed as under:
authorized share capital of the company is
Rs.60 crores and paid up capital is Rs.17.30
crores as on 31.3.2011. As an ISO 9001:2008
C e r t i f i e d p r e m i e r c o n s u l t a n c y a n d
engineering organization, PDIL played a
pivotal role for the growth of Indian Fertilizer
Industry. It has over six decades of
experience and expertise in providing
design, engineering and related project
execution services from concept to
commissioning of various Projects. PDIL
provides the services mainly in the following
five sectors viz. Fertilizers, Oil & Gas and
Refinery, Chemicals, Infrastructure, Offsite
and Utilities.
ANNUAL REPORT 43
PDIL is the prime mover of most of the
fertilizer projects, especially Ammonia, Urea
and Offsites & Utilities established in India in
the last four decades. It has engineered and
successfully executed so far 25 Ammonia
Units (Grass Root / Expansions) and 38 Urea
organizations in India. The facilities include
LPG Import Terminals, POL Terminals/
Depots/Storages, Crude/Gas/ Petroleum
Products Pipelines, Gas Gathering Stations,
Mounded Storages for LPG, Atmospheric
Cryogenic Storages for Petroleum Products,
LPG Bottling Plants, City Gas Distribution Units (Grass Root / Expansions) in the including CNG Stations, Skid Mounted/ Re- country. Our esteemed clients are almost all locatable Refinery. PDIL has undertaken the major Fertilizer Manufacturers in India in Revamp Jobs for Refineries covering Public, Co-operative and Private Sectors. Atmospheric Distillation Unit, Sulphur Apart from the projects in India, PDIL Recovery Unit, Lube Oil Complex, Crude
provided Detailed Engineering and other Distillation Unit, Crude Topping Unit. etc.
Associated Consultancy Services for the PDIL provided detailed engineering services
then world's largest single stream gas based for three large Hydrogen Plants for ESSAR
2200 MTPD Ammonia Plant of M/s Burrup Engineering Centre for their Refinery
7.5.2 Operating Results
PDIL had earned Profit(after tax) of Rs. 21.02
crores for the year 2010-11 out of the total
turnover of Rs. 111.20 crores. During the
period April to November, 2011, a profit of Rs.
21.19 crores (before Tax) has been earned
out of the total turnover of Rs 70.48 crores.
The estimated net profit for the year 2011-12
is Rs. 29.85 crores.
7.5.3 Declaration of Dividend
Dividend is being paid continuously since
2007-08. A dividend of 22% of the paid up
capital of the company amounting to Rs.3.81
crores has been paid in the year 2010-11.
7.5.4 'Excellent' Ranking In MOU
PDIL has secured Excellent rating in MoU
since the first year of its singing MoU in 2006-
07. PDIL got 'Excellent' MoU rating for 2009-
10 and 'Excellent' rating is expected in 2010-
11 also. PDIL won prestigious MoU
Excellence Award for 2008-09 for top
performing CPSE's in the Consultancy
Sector, which was conferred by Hon'ble
Prime Minister of India, Dr. Manmohan Singh
on 15.12.2010.
7.5.5 Engineering & Consultancy Division.
i Fertilizer Sector
Fertilizer Pvt. Ltd., Australia. The Project was
commissioned successfully in 2006. PDIL
tied up with M/s MHI, Japan for associating its
engineers for their ammonia projects in
Russia. PDIL is also currently providing PMC
Services for Brownfield project of Algeria
Oman Fertilizer Projects at Arzew, Algeria
and Engineering Consultancy Services for
several assignments of M/s Jordan India
Fertilizer Company (JIFCO) in Eshidiya,
Jordan. PDIL is providing engineering
services for many Revamp / Modernization /
Energy Saving Schemes for its clients viz.
KRIBHCO at Surat, NFL at Vijaipur, RCF at
Thal, GSFC at Vadodara, etc. PDIL is working
on a prestigious order from M/s Matix
Fertilizers & Chemicals Ltd. for providing
Detailed Engineering Consultancy Services
for a 2200 MTPD Ammonia Plant at
Panagarh, West Bengal, which is the first
plant in India based on Coal Bed (CBM)
Methane feedstock. Besides, PDIL secured
orders for PMC services for Feedstock
Changeover Projects at Panipat, Bathinda
and Nangal from NFL, at Bharuch from
GNFC and at Chennai for MFL.
ii Oil & Gas and Refinery Sector
PDIL has provided services for Projects in Oil,
Gas & Refinery Sector owned by all the major
44 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
expansion Project at Vadinar, PMC services
for installation of Hydrogen unit of IOCL
Barauni and Sulphur Recovery Unit for IOCL
Mathura. PMC services for installation of
Hydrogen Unit at CPCL Chennai, for
Debottlenecking of FCCU-I & GCU for HPCL
Vizag refinery, for installation of H2 & N2 unit
on BOO basis at Paradeep for IOCL, for Flue
Gas Desulphurization system & Purge Gas
treatment unit for HPCL of Vizag, etc. are
under progress.
iii Chemical Sectors
PDIL has undertaken many projects in
Chemical sector such as Methanol Plant,
Hydrogen Plant, Methyl Amines, Sulphuric
Acid, Phosphoric Acid, Nitric Acid, Sodium
Nitrite/Nitrate, Ammonium Nitrate and
Ammonium Bi-Carbonate. PDIL is currently
providing consultancy services to GAIL for
GSU & GPU modification job at their Pata
P e t r o c h e m i c a l P l a n t a n d D e t a i l e d
Engineering Services to GSFC, Baroda for
Methanol Plant. M/s Shriram EPC has
associated PDIL for providing Basic Design
Engineering for Ammonium Sulphate Plant
and Ammonia Liquor Treatment Plant of
Rourkela Steel Plant at Rourkela.
iv Infrastructure sector
PDIL has established credentials in
infrastructure sector also and has provided
PMC services/ Review consultant services
for Housing projects of the Ministry of
Defence, City Water Distribution system.
v Offsites and Utilities
PDIL has designed, engineered, tendered
and procured many Offsites and Utilities
packages for a large number of clients. These
include DM Water Plants, Effluent Treatment
Plants, Captive Power Plants, Material
handling Plants, and Atmospheric Ammonia
Storage and Handling facilities.
vi Assignments Abroad
PDIL is striving hard to make a breakthrough
in securing assignments from abroad.
Presently PDIL is providing PMC Services for
Algeria Oman Fertilizer Project at Arzew,
Algeria for AOA, Algeria. During the current
year, PDIL secured the jobs of preparation of
Pre-Feasibility Reports (PFRs) for Coal
based Ammonia plant for M/s MEC,
Indonesia and for Phosphatic fertilizer
complex in Andhra Pradesh for M/s Industies
Chimiques du Senegal.
vii Third Party Inspection & NDT Services
PDIL is a recognized Third Party Inspection
Agency for Inspection & Quality Assurance
Services and undertakes TPI Services for
many projects of organizations like IOCL,
RINL/VSP, BHEL, BPCL, HPCL, NDMC,
PWD, State PHEDs, ONGC, DTL etc. It
provides services for Shop & Field Inspection
of Equipment & Machinery, Electricals,
I n s t r u m e n t s , E l e c t r i c a l S a f e t y A u d i t
Inspections, Terminal Automation System of
Oil Terminals, Depots & Retail outlets and
Work Assessment & Evaluation of Vendors. It
provides NDT services for plants in various
sectors like Fertilizer, Chemical, Refineries,
Oil & Gas, Cross Country pipeline etc. PDIL
specialized NDT services include Automatic
Ultrasonic scanning, Infra-Red Thermo-
Vision/imaging, Eddy current testing,
Vibration signature analysis etc. PDIL
undertakes Inspection, statutory testing &
safety Certification of storage tanks for
petroleum products as well as ammonia.
viii Technical Audit
Department of Fertilizers (DoF) continued to
engage PDIL for Techno-commercial Audit of
SSP Plants located throughout India. The
Audits were undertaken and the reports with
TAC observation and comments have
already been submitted to DoF.
ix Manufacturing of Catalysts
PDIL's Catalysts Division located at Sindri
ANNUAL REPORT 45
EMPLOYEE STRENGTH AS ON 30.11.11 (REGULAR INCLUDING MANAGEMENT
TRAINEES AND CONTRACT) Category Total MIP SC ST OBC A 413 48 20 62 B 33 4 0 2 C 32 9 0 7 D Nil Nil Nil Nil On contract 67 9 3 13 Total 545 70 23 84
(Jharkhand) manufactures and supplies a
wide range of commercially proven catalysts
used in Ammonia Plants and other Industries.
Catalysts manufactured by PDIL are Primary
Gas Reforming, Secondary Reforming, Iron-
Chromia, High Temperature CO Shift,
Copper Promoted High Temperature Shift,
Conventional Low Temperature Shift, High
Copper Low Temperature Shift, Methanation
& Super Methanation, De-Sulphurization,
and Vanadium Pentoxide.
PDIL's Catalysts are in use in almost all the
old and new generation Ammonia Plants in
India in the Public, Cooperative and Private
Sector. Besides Fertilizer Plants, PDIL's
Catalysts are used in Refineries also. PDIL's
Vanadium Pentoxide Catalysts have been
supplied to many Sulphuric Acid Plants in
India as well as abroad.
7.5.6 In-house strengths of PDIL
i IT & Other Infrastructure Facilities
PDIL has two full fledged Design Engineering
Centers situated at NOIDA and Baroda. Both
the design engineering centers are equipped
with State-of-the-Art computer and software
f a c i l i t i e s s u c h a s A u t o C A D 2 0 1 2 ,
Microstation, Plant Design System (PDS),
Smart Plant Electrical, Smart Plant
Instrumentation, Smart Plant P&ID, Frame
Work Plus, Smart Plant Review, CAESAR II,
PV Elite, Mocroprotal, STAAD Pro, Aspen
Plus, Syner GEE Gas, ASD Pipe Router, ASD
Pipe Support Optimizer, PHA-Pro, Safeti
Micro, Conval, ETAP, Primavera, MS Project
and work specific softwares for carrying out
design engineering works. PDIL, being a
member of Heat Transfer Research INC.
USA, has the right to use Xchanger Suite of
Software.
All the offices of PDIL are connected through
VPN (Virtual Private Network).
ii Enterprise Resource Planning (ERP)
Project
With the implementation of SAP ERP, PDIL
has been able to integrate its activities on a
single platform. Go live of SAP was done on
February 8, 2011 and in use since then, which
has further strengthened MIS.
DMS Project
PDIL is contemplating to implement
“Documentum” of EMC2 as its Electronic
D o c u m e n t M a n a g e m e n t S y s t e m f o r
preserving all its documents in electronic
form.
iii Human Resources
PDIL is having highly competent and
experienced technical manpower. At present,
PDIL is having more than 500 technical
employees of various disciplines such as
C h e m i c a l E n g i n e e r i n g , M e c h a n i c a l
Engineering, Civil & Structural Engineering,
Electrical Engineering, Instrumentation
E n g i n e e r i n g , C o m p u t e r S c i e n c e &
Information Technology, etc. from reputed
Engineering Institutes. With the vast
experience & technical expertise of these
resources, PDIL is having annually more than
1.1 Million Man-Hours which are sufficient to
execute a number of mega projects
simultaneously.
7.5.7 Employment to SC/ST/OBC/ PH persons
In line with Government Guidelines issued
from time to time, your company continues to
extend required number of facilities to
SC/ST/OBC employees. The details of
employees as on 30.11.11 is as follows:-
46 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
C o m p l a i n t s / G r i e v a n c e s r e d r e s s a l
m e c h a n i s m i s i n p l a c e . R e g a r d i n g
implementation of National Policy for
Persons with Disabilities, for easy/ hassle
free mobility of employee with disability, ramp
has been constructed and in respect of
welfare, development and empowerment of
women and for mainstreaming gender
issues, there is complete equality gender in
PDIL.
alleviate the social imbalances and helping
the community in which it operates.
Accordingly, PDIL Board has approved the
CSR policy on the basis of guidelines issued
by DPE. During the year 2010-11, an amount
of Rs. 13.78 lakhs has been spent on CSR
activities towards education of slum children,
Animal Hospital, Orphanages etc &
contribute to NCSR Hub thru' Tata Institute of
Social Science.
Celebration of Hindi Fortnight at PDIL in September, 2011
7.5.8 Corporate Social Responsibility
PDIL has been pursuing CSR activities as per
policy duly approved by the Board as well as
directives issued by Govt. of India from time
to time. As per the Govt. Guidelines on CSR
activities, the CSR fund has also been
created. The objective of CSR policy is to
7.6 HINDUSTAN FERTILIZER CORPORATION
LIMITED (HFCL)
7.6.1 Introduction
Hindustan Fertilizer Corporation Limited
(HFCL) has its units located at Barauni
(Bihar), Durgapur (West Bengal). It also has
ANNUAL REPORT 47
an un-commission project at Haldia (West
Bengal). Against the authorized share capital
of the company of Rs.1200 crore, the paid up
share capital was Rs. 686.54 crore as on
31.3.2011.
7.6.2 Status of Company's case with BIFR
The Company was referred to BIFR in the
year 1992 and since then it is still under BIFR.
The Govt. of India had decided to close down
Barauni and Durgapur Units and Haldia
Division along with other offices and
Establishments of the Company in the year
2002. Now, Cabinet Committee of Economic
Affairs (CCEA) in its meeting held on
04.08.2011 has approved the proposal for
revival of closed Units of HFCL. A copy of
Draft Rehabilitation Scheme (DRS) of the
company was submitted to BIFR.
Reduction in manpower by 7 during the year
was due to superannuation.
Due to the decision taken by the Govt. of India
to close down the Company, there was no
activity on promotion, recruitment, etc. during
the year.
7.7 R A S H T R I Y A C H E M I C A L S A N D
FERTILIZERS LIMITED (RCF)
7.7.1 Introduction
Rashtriya Chemicals and Fertilizers Limited
(RCF) was incorporated as a separate
company on 6th
March 1978 as a result of
reorganization of the erstwhile Fertilizer
Corporation of India Limited (FCI). At the time
of its inception, there was only one unit of
company at Trombay. In 1985, another unit of
RCF was established at Thal which is about
The BIFR has considered the revival 100 KM from Trombay. As on 31st
March
proposal in the hearing held on 18.8.2011,
15.11.2011 & 10.1.2012. The operating
agency and HFCL is taking necessary action
as per the direction of BIFR. The next date of
BIFR hearing is scheduled on 1.3.2012.
7.6.2 Revival of Units/Divisions of HFCL –
status thereof
CCEA, in its meeting held on 04.08.2011, has
approved the proposal for revival of closed
Units of HFCL, viz. Barauni, Durgapur and
Haldia for setting up a 1.15 MTPA Urea Plant
at each of these locations and approved DRS
as per the recommendation of ECOS. DRS
has been submitted before BIFR for
approval.
7.6.3 Financial Performance
During the year 2010-11, the Company
incurred a book loss of Rs. 382.28 crore
(after considering prior period adjustments
and tax) as compared to previous year's net
loss of Rs. 382.47 crore.
7.6.4 Manpower
The manpower as on 31.03.2011 was 23 as
compared to 30 as on 31.03.2010.
2011, the company had an authorized share
capital of Rs.800 crore and a subscribed and
paid up capital of Rs.551.69 crore.
7.7.2 Production Performance
The annual installed capacity of all the units of
RCF is about 10.36 LMT of nitrogen and 1.17
LMT of phosphate (as P2O5). The production
of nitrogen & phosphate during 2010-11 was,
10.759 LMT and 0.986 LMT respectively.
Besides fertilizers, the company also
produces a number of industrial products
such as Methanol, Concentrated Nitric Acid,
Methylamines, Ammonium Bicarbonate,
Sodium Nitrate, Sodium Nitrite, Dimethyl
F o r m a m i d e , D i m e t h y l A c e t a m i d e ,
Ammonium Nitrate, Argon, etc.
During April-November 2011, RCF produced
6.615 LMT of nitrogen as against 7.026 LMT
during the same period of the previous year.
Company also produced 0.663 LMT of
phosphate (as P2 O5 ) as against the
production of 0.614 LMT of the previous year.
During the year 2011-12, the Company is
likely to produce 10.69 LMT of nitrogen and
1.140 LMT of phosphate.
48 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
7.7.3 Sales Performance
The sales turnover during the year 2010-11
was Rs.5574.10 crore compared to
Rs.5697.18 crore in the previous year. The
sales turnover of industrial products division
of the Company was Rs. 726.25 crore for
the year 2010-11. During the period Apr- Nov
2011 sales turnover of industrial production
division was Rs.537.42 crore.
7.7.4 Financial Results
During the year 2010-11, the company
reported a net profit (after tax) of Rs. 245.12
crore. During the period April – November
2011, the Company has made a net profit
(before tax) of Rs.157.37 crore & net profit
after tax of Rs.106.30 crore.
7.7.5 Modernization/expansion Schemes
Thal Ammonia/Urea Revamp
Thal Ammonia Revamp Project is being
implemented by the Company to enhance capacity of existing Thal Ammonia Plants
from 2 x 1500 MTPD to 2 x 1750 MTPD and to reduce specific energy consumption from 9.0
MKcal/MT to 8.15 MKcal/MT. Under Thal
ammonia revamp project Urea capacity will enhance from present 17.07 to 20 LMT per
annum after it's commissioning in 2011-12. This revamp is being carried out, by the
company, in three phases. So far two phases
have been completed and this has resulted in the increase of 400 MTPD of Urea
production. Last phase of the revamp will be completed in March 2012.
Shri Ajay Bhattacharya, Secretary (Fert) (2nd from right), Shri R.G. Rajan, CMD, RCF Ltd. (centre), Dr. V. Rajagopalan, Additional Secretary & FA, DoF (extreme right), Shri Sham Lal Goyal, Joint Secretary, DoF (left) on the occasion of signing of MOU between Department of Fertilizers and Rashtriya Chemicals & Fertilizers Limited (RCF)
ANNUAL REPORT 49
Thal Ammonia Revamp: Phase-II
Erection of S-50 Convertor
7.7.6 Grievance Redressal
Public / Staff grievance redress machinery
and status of Grievances of company and its
field agencies / unit / attached office
The Company has a good grievance address
and redressal system. Any citizen having
complaints in respect of the production or
services rendered may approach the
Company. Similarly any aggrieved customer
/ dealer or other citizen can approach the
Company for any failure of the quality / price
charged / conduct of any officer / employee
and will be dealt as under.
The grievances can be addressed to a
special officer of the Company not below the
rank of Dy. General Manager who will act as
the Nodal Officer for redressal. The name,
address and telephone No. of the officers is
available on Internet on Company's website
www.rcfltd.com. It is assured that the Nodal
Officer will immediately take up the issue with
the concerned department and appropriate
action will be taken within seven days from
the date of receipt of the complaint or an
appropriate reply is sent within seven days as
the case may warrant.
A similar grievance address and redressal
system procedure is followed by the
Company in issues related to staff also.
7.7.7 Employment Of Sc/st, Ex-service Men,
P h y s i c a l l y H a n d i c a p p e d & O t h e r
Backward Classes
The guidelines regarding reservation in
Recruitment and Promotion for SC, ST, OBC,
Ex-Servicemen and Physically Handicapped
Persons (PHP) are followed.
Out of total strength of 4,144, there are 576
SCs, 257 STs, 341 OBCs, 7 Ex-Servicemen
and 35 PHPs on the rolls of the Company.
7.7.8 Welfare of Minorities & Reservation In
Dealership:
RCF as a policy includes representative of
the minorities in the recruitment selection
50 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
boards to ensure that the minorities get an
adequate share in the services and benefit of
developments.
7.7.9 Corporate Social Responsibility
The company continued with its Fertilizer
Promotion Programmes to educate the
farmers in the scientific and balanced use of
fertilizers. RCF has two Farmer Training
Institutes, one at Nagpur and other at Thal to
impart training to farmers and farm labourers
in integrated development and new farming
techniques etc.
T h e I n t e g r a t e d R u r a l D e v e l o p m e n t
Programme is implemented in various
villages of the country. Overall development
of these villages is the focal point. Some of
the programmes carried out under Integrated
Rural Development Programme (IRDP) are
as under:
a) Meeting Basic Needs of Rural Community –
The scheme covers providing essential
amenities like drinking water supply, school
buildings, community centers, development
of irrigation systems etc.
b) Agricultural Development Programme - This
f o c u s e s o n e c o n o m i c u p l i f t m e n t o f
small/marginal farmers and landless
labourers through training and education.
c) Subsidiary Occupation- Artisan Development
Programme This provides a platform for
training and making available financial
facilities to rural artisans and entrepreneurs
which enable them to revive and develop
their skill for commercial use.
d) S o c i a l F o r e s t r y a n d W a s t e L a n d
Development Programme - This focuses on
development of sericulture, social forestry,
waste land use, dry land farming and biogas
development.
e) P u b l i c H e a l t h & V i l l a g e S a n i t a t i o n
Programme – This covers health care, village
sanitation, health camps, and veterinary
camps.
f) Youth and Women Skill Development
Programme - Rural sports and cultural
activities are organized in different villages to
encourage participation by youths.
g) Soil Testing - The Company places
tremendous importance on empowering
farmer to increase the yield. Soil diagnostics
form a major part of determining which
fertilizer needs to be used for each soil and
crop. The Company has also mobile soil
testing laboratories across its major
marketing territories which undertakes soil
sample analysis. About 70,000 soil samples
are analyzed every year.
h) Micronutrient Analysis - To increase crop yield
the presence of micronutrients in adequate
proportion is necessary. Micronutrients
analysis identifies the deficiency in the soil
and prescribes doses of micronutrients that
need to be applied to ensure optimum yield.
About 1,000 samples are analyzed every
year.
7.7.10 Adoption of New Technology
a) Clean Development Programme
Under Clean Development Mechanism
(CDM), RCF has taken up N2O abatement
programme in its Nitric Acid plants at
Trombay unit. By reducing N2O emission,
which is a greenhouse gas having a global
warming potential of 310, company will be
awarded tradable Certified Emission
Reduction (CER). The Nitric Acid CDM
projects have been successfully registered
with UNFCCC in November 2009. Also in
January 2011, RCF has received first tranche
of 1,55,115 CER's from UNFCCC.
b) STP Plant
In its efforts towards conservation and
recycling, RCF has set up a highly
sophisticated Sewage Treatment Plant which
is one of its kind with an in built capacity to
treat 5 million gallons (MGD) of sewage
received from the Mumbai Municipal
Corporation. After treating the sewage, plant
ANNUAL REPORT 51
generates 3.5 (MGD) of pure water each day,
and saves the equivalent amount of potable
water for the city. Further RCF is planning to
set up another STP plant and become totally
Consequent upon reorganization of FCI, the
Nangal unit (including Nangal expansion
project) of FCI was transferred to NFL w.e.f.
1.4.1978.
self sufficient in its day to day industrial water
A gas based ammonia and urea fertilizer requirement.
project on the HBJ popeline at Vijaipur in
7.8 NATIONAL FERTILIZERS LIMITED (NFL) Guna district of Madhya Pradesh, with an
annual installed capacity of 7.26 lakh tones 7.8.1 Introduction Urea commenced commercial production on
NFL is a Schedule 'A' and Mini Ratna 1.7.1988. The urea capacity was doubled
Company, which was incorporated on 23rd
August, 1974 for setting up of two
Nitrogenous fertilizer plants, at Bathinda
from 7.26 LMT to 14.52LMT per annum on
commissioning of its expansion unit on
31.3.1997. The production capacity of gas
based plants in the country has been re- (Punjab) and Panipat (Haryana) with LSHS assessed w.e.f. 1
st april, 2000 resulting in
as feedstock, each having an installed
capacity of 5.11 lakh MT of Urea per annum. capacity revision from 7.26LMT to 8.64LMT
for both Vijaipur-I and Vijaipur-II.
NFL VIJAIPUR PLANT
*****
52 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
Group Total number of employees
Number of SC/ST/OBC/EXSM/PH
SC ST OBC *EXSM **PH
A 1623 356 81 81 4 9
B 1938 508 157 113 31 23
C 827 210 41 110 32 15 D 137 108 3 7 1 3
Total 4525 1182 282 311 68 50
A revamp of urea plant at Nangal was
successfully completed three months ahead
of schedule and commercial production
commenced w.e.f. 1st
Feb.2001. With this, the
installed capacity of urea at Nangal Unit
tones per annum raising the company's total
installed capacity to 32.31 LMT of urea
corresponding to 14.86 LMT of 'N' (Nitrogen)
in terms of fertilizer nutrient.
The company also produces various
industrial products like nitric acid, ammonium
nitrate, sodium nitrite/nitrate, sulphur,
metenol, liquid nitrogen, liquid oxygen etc.
besides bio-fertilizers. The company
commissioned an argon gas plant designed
to produce 120 NM3/hr. of Argon gas at the
Panipat Unit in October 1997. A Methanol
Augmentation Scheme at Nangal Unit was
commissioned in October 1998 thereby
enhancing the daily production capacity of
Methanol from 50 tonnes to 67 tonnes. The
company's bio fertilizers plant at Indore
produces three strains of bio fertilizers with
an installed capacity of 100 MT per annum.
The authorized capital of the company as on
31.3.2011 stood at Rs.1000 crore and the
paid up capital at Rs.490.58 crore,
comprising Govt. of India share of 479 crore
(97.64%) and the remaining Rs.11.58 crore
(2.36%) held by financial institutions and
others.
The sales turnover including subsidy for the
year was Rs.5791 crore. During the year,
sales turnover for industrial products was
Rs.115 crore.
7.8.4 Financial Performance
NFL registered a Profit before tax (PBT) of
Rs.204 crore and Profit after tax (PAT) of
Rs.139 crore during 2010-11. The company
has maintained its trend of paying dividend
since last 26 years. The total dividend payout
during 2010-11 was Rs. 48.46 crore
(including dividend tax of Rs. 6.76 crore)
which is 30% of the Profit after Tax (PAT).
7.8.5 Employment of SC/ST, Ex-Servicemen,
P h y s i c a l l y H a n d i c a p p e d & O t h e r
Backward Classes (OBCs) Persons in
Public Sector Undertakings (As on
30.09.2011).
* EXSM – Ex- Servicemen ** - PH – Physically Handicapped
7.8.2 Production Performance
7.8.6 P u b l i c
/ S t a ff G r i e v a n c e R e d r e s s
During the year 2010-11 the company
produced 33.80 LMT of Urea (104% of
installed capacity). The company achieved
ever best production of 231 tonnes of Bio-
fertilizers and 120067 tonnes of Neem
Coated Urea. The percentage share of NFL in
Urea production in the country has been
estimated at 15.4%.
7.8.3 Sales Performance
The company, during 2010-11, sold 33.59
lakh tonnes of Urea. Company achieved
ever best Bio-fertilizers sales of 219 tonnes.
Machinery
Based on the model grievance procedure
notified by DPE, company has framed a
'Grievance Redressal Procedure' for
employees of NFL. The objective of the
Procedure is to provide easily accessible
machinery for settlement of grievances and
to adopt measures as would ensure
expeditious settlement of grievances of
employees leading to increased satisfaction
on the job and resulting in improved
p r o d u c t i v i t y a n d e f f i c i e n c y o f t h e
organization.
ANNUAL REPORT 53
For systematic monitoring and supervision of Public Grievances, Head of Corporate HR
Department has been nominated as Director
(Grievance). In addition to this, the company has also set up a “Public Grievances
Cell” at the Units which is headed by a Grievance Officer, who generally belongs
to senior management cadre. Apart from
t h i s o n t h e C o m p a n y ' s w e b s i t e "www.nationalfertilizers.com”, a feedback
form has been created for posting of query / grievances by the public.
7.8.7 Information relating to welfare of Minorities and reservation in dealership
representation of the minority communities
on interview boards in Group C & D. As on 30-
09-2011, the percentage share in NFL
dealership under SC/ST category is 26.79%.
7.8.8 Corporate Social Responsibility and
Agriculture Extension Activities
The Company is committed towards
upliftment of under privileged Section of the
Society and has supported various social and
communities initiatives touching the lives of
large number of people. The Company has
identified CSR Activities in economic,
environmental, health and social areas and
All the employees at Units & Offices celebrate had earmarked Rs. 3 crore towards CSR
the festivals of various communities with a
sense of brotherhood. The organization
believes in equality of all communities and
follows all Government regulations on
empowerment of minorities such as
activities during the financial year 2010-11.
Separate budgets and achievement targets
have been fixed for each CSR initiative. The
unspent budget from 2010-11 has been
carried forward to the next financial year.
Vocational Training program for women
54 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
Roadmap was developed to undertake
integrated development of 9 villages situated
in the vicinity of our Plants/Offices. Baseline
survey has been completed in all the Units/
Offices of the Company. Activities identified
under CSR like digging of tube well for
supplying of potable water, laying pipelines
for distribution of water, Construction of
concrete approach roads, Anganwadies,
kitchen sheds, toilets, overhead water tanks,
carrying out various civil jobs in nearby
villages, construction of boundary wall,
Preparation of Volley ball play ground,
installation of submersible tube well,
procurement of furniture for distribution in
nearby schools etc. are Bathinda. Further,
procurement of 35 nos. of solar lights for
installation in nearby villages is under
process.
100519 saplings have been planted during
the year in the vicinity of Company's plants
and units. Company's manufacturing units at
Vijaipur, Panipat, Bathinda and Nangal also
carried out various useful activities for the
benefit of socially and economically weaker
sections of the society in the surrounding
areas of the respective unit. Health
awareness Programs / Medical Camps were
organized. In addition, financial aid, ceiling
fans, sewing machines etc. were also
provided to the poor and needy persons of
nearby villages.
In addition, Company extended financial
assistance to Bitnoti College, Orissa for
construction of one Auditorium-cum-Gallery
Class Room. Mayurbhanj is a tribal
dominated backward district of Odisha. The
objective of construction of auditorium is to
prepare students of backward tribal areas to
face the competitive world by developing
their presentation skills, public speaking and
entrepreneurship.
Balasore is a tribal dominated backward
district of Orissa and Utkal Bal Ashram is one
of the oldest and reputed orphanage of
Balasore. This Ashram was established in the
year 1944 and has been rendering valuable
services to about 250 orphan children.
Company is extending a contribution for
construction and renovation of Utkal Bal
Ashram.
Frontiline demonstration of Kisan Urea on paddy crop
ANNUAL REPORT 55
58
2009-10 2010-11 2011-12
(Projected) 1 Production / in Tonnes
Factamfos 20:20 753744 644454 635284
Ammonium Sulphate 179546 200311 187218
Caprolactam 42006 44345 42353 2 Sales / in Tonnes
Fertilisers 1044893 932878 915252
Caprolactam 38253 44136 43422 3 Financial / Rs. lakh
Turnover 214161 251183 313850
Profit / Loss (-) before
Interest, Depreciation
and tax
3654 13439 436
Profit/Loss after tax (-)10383 (-)4933 --
As in the past, the Company continued to
facilitate the farming community in improving
the crop productivity. The Company also
continued its efforts to improve the living
standard of socio-economically weaker
sections of the society.
7.9 THE FERTILIZERS AND CHEMICALS
TRAVANCORE LIMITED (FACT)
7.9.1 Introduction
The Fertilizers And Chemicals Travancore
Limited (FACT) was incorporated in the year
1943 and as the first large scale fertilizer plant
in India located at Udyogamandal, Kerala
started production in 1947. Initially in the
private sector promoted by the Seshasayee
Brothers, FACT became a PSU in the year
1960 and towards the end of 1962,
Government of India became the major
shareholder of FACT.
From a modest beginning, FACT has grown
and diversified into a multi-division/
multifunction Organization with core activities
in manufacture and marketing of Fertilisers
and Petrochemicals, Design, Engineering &
Consultancy and in Fabrication & Erection of
Industrial Equipment.
7.9.2 Performance
During the Financial Year 2010-11 FACT was
able to maintain an impressive level in the
overall performance and made an upsurge in
Turn over. The Turn over of the company
touched an all time record of Rs.2512 Crore.
During the year 2010-11, the company has
achieved considerable improvement in the
p r o d u c t i o n o f A m m o n i u m S u l p h a t e .
Production, Sales and profitability of the
company for the year 2010-11 compared to
2009-10 is given below:
7.9.3 Performance Highlights
During the current year up to November 2011,
the company produced 395144 MT of NP
which is 76 % of the target as compared to
442749 MT during the corresponding period
of the previous year. Production of
Ammonium Sulphate upto November 2011
was 118083 MT which is 87% of the target as
against 125897 MT during the corresponding
period of the previous year.
During the financial year up to November
2011, the total sale of Fertilizers is 556608
MT as against 717892 MT during the same
period of the previous year.
During the year 2011-12 upto November
2011, the company has sold 386697 MT of
Factamfos and 135580 MT of Ammonium
Sulphate.
During the financial year till November 2011,
19930 MT of Zincated Factamfos, the
commercial production of which began last
year, has been sold in the market. This
product provides higher returns to FACT and
will also serve to promote the balanced use of
fertilizer nutrients in the country.
In order to improve the turnover and
profitability, the company is concentrating in
increasing volume of traded products.
56 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
During the year 2011-12, FACT has already
handled a Urea ship of 32996 MT at Cochin
Port. To promote Integrated Plant Nutrient
Management, FACT is expanding the sale of
organic manure to the State of Tamil Nadu.
During the year 2011-12, FACT has
considerably increased the sale of bulk
Gypsum and plans to sell 50,000 MT of
bagged Gypsum. The sale of bulk Gypsum is
set to touch an all time record of 6 to 7 lakh MT
during the year 2011-12. Sale of Gypsum
reached 492500 MT upto November 2011 as
against 252050 MT during the same period
last year. New fertilizer products, Zinc fortified
Gypsum, FACT Organic, and Zincated
factamfos are also being promoted in the
market.
The production and financial performance of
the company for the year 2011-12 upto
November 2011 has not been encouraging
as compared to the corresponding figures of
the same period of the previous year.
Shortage of phosphoric acid and extended
shut down has affected the production
performance of the company during the first
quarter of the current year. The production
and profitability of the company have
improved from November 2011. During the
second and third quarter, the company has
been able to achieve satisfactory level of
production. The company has made
arrangement for tie-up of raw materials and
hopeful of make good of the production loss
of the 1st
quarter and end up the financial year
2011-12 with a marginal profit.
7.9.4 Crop Specific Fertilizers/FACTMIX
FACT has developed its proprietary
formulation branded known as FACTMIX.
This formulation has been found very
successful for important crops of Kerala such
a s R u b b e r, Ba n a n a , R i ce , Ta p i o ca ,
Vegetables, Cardamom, Coconut etc. as
proved in research experiments and in field
trials conducted at FACT (R&D) and Kerala
Agricultural University. In order to broaden
the product base and extend geographical
coverage, FACT has undertaken research on
development of Customized Fertilizer –
Granulated (CFG) on important crops of
Tamil Nadu namely Rice, Maize, Banana and
Sugarcane in association with Tamil Nadu
Agricultural University (TNAU), Coimbatore.
This project has been undertaken as per the
guidelines of Ministry of Agriculture,
Government of India.
7.9.5 FACTMIX for Paddy
After successfully launching crop specific
fertilizer mixtures for Rubber, Coconut,
Cardamom and Banana under the brand
name of FACTMIX, during the year 2011-12,
FACT has launched crop specific fertilizer
mixture for Paddy under the same brand
name, FACTMIX. This highly beneficial
fertilizer mixture has been developed after
i n t e n s i v e i n - h o u s e R e s e a r c h a n d
Development study and field study by Kerala
Agricultural University.
7.9.6 MOU with Coir Board
FACT and Coir Board have entered into a
Memorandum of Understanding (MOU) for
conducting research studies for developing a
technology to convert coir pith (a waste in the
production of coir from coconut husk) into
value added products like organic fertilizer
and filler for fertilizer mixtures. FACT
Research and Development wing will carry
out the research studies.
7.9.7 Vision Plan
In line with the long term Vision plan approved
by the Board of Directors of FACT certain
projects and schemes have been identified
ANNUAL REPORT 57
a n d a r e u n d e r v a r i o u s s t a g e s o f
consideration and approval/ implementation.
A brief outline of these projects is given
below.
A. Under Implementation
1. Feed Stock conversion of Ammonia Plant
to LNG
LNG is expected to be available at Kochi by
end of 2012. FACT is carrying out
modifications in the Ammonia Plant for using
cheaper LNG as feed stock and fuel for
Ammonia manufacture as soon as it is
available. The Project will bring an energy
saving in the Ammonia Plant to the tune of 0.3
Gcal / MT Ammonia. The total cost of the
project is estimated as Rs.31.57 crore. The
pay back period of this project on account of
energy savings alone is just six months.
2. Automation of Mixing Centre at Cochin
Division
FACT is setting up a granulated fertilizer m i x i n g p l a n t a t C o c h i n D i v i s i o n , Ambalamedu. The project is proposed to be executed on a Lumpsum Turnkey (LSTK) mode with the Project Management Contract (PMC) handled by FEDO.
3. Sulphuric Acid Storage Facility at
Willington Island
The company has decided to set up its own
Sulphuric acid storage facility at Willington
Island to enable receipt of Bulk Acid
shipments of above 5000 MT. It is proposed
to set up 2 storages of 8200 MT each. The
total cost of this project is Rs.12 Crore. The
benefits of this project are the availability of
Bulk quantities of Sulphuric Acid which will
facilitate increasing captive production of
phosphoric acid.
B. Proposed
1. New Urea Plant at Udyogamandal
FACT intends to set up a new Urea plant of
1500 MT capacity per day at Udyogamandal
Ammonia Plant at a Project cost of Rs.940
Crore. A pre Feasibility report has been
prepared by FACT Engineering And Design
Organisation (FEDO). Bids were invited for
selection of process licensors. The DPR is
being prepared by FEDO.
2. A New 1000 TPD NP Plant
FACT is considering to set up an additional
NP Plant of 1000 TPD capacity at Cochin
Division along with revamp of Willingdon
Island Facilities for handling increased
volumes of Raw-materials utilising modern
equipments to increase the discharge rates
from shipments. The estimated project cost is
Rs.283 Crore (including Port improvement
schemes) distributed over 3 years.
3. Revamp of Phosphoric Acid Plant at
Cochin Division
One of the major problems being faced by the
company to sustain higher levels of
production at present is the non availability of
sufficient quantities of imported phosphoric
acid. In order to meet the challenge posed by
this problem, FACT intends to revamp its
phosphoric acid plant at Cochin Division to
increase the capacity from 360 Tonnes per
day to 550 to 600 Tonnes per day. The
r e v a m p w o u l d m e e t t h e c o m p a n y ' s
requirements for producing 2500 MT of NP
complex fertilizer on a daily basis.
4. Marketing of SSP
FACT has plans to enter into the area of SSP
marketing from existing SSP plants in the
southern region through a tie up with the
owners of the existing plants.
7.9.8 Redressal of Public Grievances and
Welfare Measures
A Public Grievance Cell is functioning in the
Company, as per norms laid down by utilising the CO2 being vented from the Government of India. At present, no
58 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
grievance received from public is pending for
redressal.
7.9.9. E m p l o y e e G r i e v a n c e R e d r e s s a l
Machinery
A machinery for redressal of employee
grievances exists in the Company. Generally
the grievances are related to work, work
place, shift arrangement, grant of increment,
promotion, salary fixation, transfer, etc. An
aggrieved employee may submit a complaint
/ request for settling the grievance in the
Division and if still aggrieved with the decision
of the Division Head, it may be submitted
b e f o r e t h e a p p r o p r i a t e G r i e v a n c e
Committee. Separate grievance committees
exist for examining and redressal of
grievances of managerial and non-
Category of Dealership As on 31.03.2011
Total Dealership 7983
SC / ST 615
No security deposit is collected from SC/ST
Dealers and they are encouraged to do
business by constant advice/follow up. All
efforts will be made to ensure that maximum
representation is given for SCs/STs in Dealer
a p p o i n t m e n t s w h e r e v e r a d d i t i o n a l
dealerships are provided.
7.9.12 Corporate Social Responsibility
FACT is giving prime importance for fulfilling
its Corporate Social Responsibility. As part of
Corporate Social Responsibility, FACT has
managerial employees. The individual undertaken the following activities.
concerned is given an opportunity to present
his grievance in person before the
committee, if required. The respective
Committee will deliberate on the grievance
and give their recommendations to the
management for appropriate action. In
addition, there is an SC/ST Grievance Cell
that looks into complaints received from
SC/ST Employees.
7.9.10 Employment of SC/ST, Ex-servicemen,
Physically Handicapped and Other
B a c k w a r d C l a s s e s ( O B C s ) a s o n
30.11.2011
Company has total man-power of 3198, out of
which 430 belong to Schedule Caste, 99 to
Schedule Tribes, 1000 to OBC, 1668 to
General, 228 to women, 36 to ex-servicemen
and 72 from Physically Handicapped
categories.
7.9.11 Reservation in Dealership
FACT has always followed a policy of
encouraging SC/ST Candidates to take up
dealership. Details of dealership allotted to
SC/ST are given below:
Village Adoption Programme
Under the Village Adoption Programme,10
progressive farmers having at least one acre
of land, in a village is identified. The soils of
the plots are analyzed for major, secondary
and micro nutrients.. Based on the soil test
results, soil and crop specific nutrients as per
the respective State Agricultural University
recommendations in the form of a proprietary
fertilizer mixture developed by FACT are
g i v e n t o t h e f a r m e r s . I n a d d i t i o n ,
micronutrients specified by the University
were supplied free of cost. FACT has
c o n d u c t e d 7 s u c h Vi l l a g e A d o p t i o n
Programmes (VAP) in Kerala, Tamil Nadu,
Andhrapradesh and Karnataka.
Farmer Training Programme
The Farmer Training Programme is intended
to impart training to limited group of 20-25
farmers on balanced use of fertilizers based
on soil test results. The objectives of this
programme are to create awareness on soil
ANNUAL REPORT 59
sampling methodology and use of balanced
fertilizer based on soil test results. FACT has
conducted 13 two day Farmer Training
Programmes in all the four southern states.
Field Demonstration
This Field Demonstration Programme aims to
demonstrate the effectiveness of correct
fertilizer application at farmer level. For this
one acre of plot of the farmer is divided into 2
equal 50 cents plots, control plot and
treatment plot. In control plot, farmer's
practice is followed. In treated plot,
University recommendation by way of
FACATMIX is given based on soil test
results. The yield difference between
treated plot and control plot are
compared. FACT has conducted 9 Field
demonstrations during the year 2010-11.
During the year a farmer's fair was
organized and effectiveness of balanced
fertilizer application was explained to the
farmers.
Drinking Water supply to residents of
EloorMunicipality
FACT is supplying drinking water for
more than 3000 households of Eloor
Municipality.
Farm level demonstration to educate farmers regarding scientific farming with optimum use of fertilizers. Shri Sham Lal Goyal, IAS & CMD, FACT along with senior FACT officers and farmers on his farm visit in Kerala
60 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
3
CHAPTER -8
8.1 FERTILIZER EDUCATION PROJECTS
8.1.1 The basic purpose of the application of
fertilizer is to enhance the crop productivity in
the country. The Fertilizer companies launch
their fertilizer projects for educating the
farmers about the quality/contents of the soil
for crops. Resultantly, the farmers are
encouraged by the companies to use the
balanced fertilizers based on the quality of
the soil nutrient wise and apply fertilizers
accordingly. Department of Fertilizers does
not implement Fertilizer Education Projects.
S u c h p r o j e c t s a r e a d m i n i s t e r e d b y
Department of Agriculture & Cooperation,
I C A R , S t a t e G o v e r n m e n t s a n d t h e
agriculture universities. However, some
fertilizer companies including PSUs do
undertake such projects as part of their
extension and marketing activities. The
PSUs under the administrative control of
Department of Fertilizers are encouraged to
launch fertilizer education projects for the
8.1.2
benefit of farming community as per the
MOUs signed with the Department of
Fertilizers in this regard. The main activities
undertaken by various fertilizer companies
under the Fertilizers Education Projects are
agricultural seminars, dealers meetings and
t r a i n i n g s , s o i l s a m p l e a n a l y s i s ,
demonstration, soil test recommendations,
exhibitions, orientation programmes, R&D
trials, field trials of fortified fertilizers, bio
fertilizers, distribution of crop literature,
organizing Krishi Melas etc, media publicity.
In order to promote balanced and integrated
use of fertilizers, Department of Agriculture &
Cooperation has introduced a new scheme
“National Project on Management of Soil
Health & Fertility” (NPMSHF) to promote
balanced and judicious use of fertilizer in
conjunction with Organic Manure on soil test
basis. The Scheme has been taken up from
2008-09 with on outlay of Rs. 429.85 crore
during 11th
Plan period.
Shri Satish Chandra, IAS, Joint Secretary DoF and CMD MFL is replying to farmer's queries on availability of fertilizers during the visit of Parliamentary Standing Committee on Chemical & Fertilizers to Kanakammal Chatram Village, Thiruvallur District, Tamil Nadu.
ANNUAL REPORT 61
8.1.3
So far, cumulative physical achievement
under this scheme in respect of Static Soil
Te s t i n g L a b o r a t o r i e s ( S T L s ) / M o b i l e
STLs/FQCLs set up/strengthened are 1049.
During 2010-11, 85.06 lakh soil samples
were analyzed against 106.95 lakh analyzing
capacity and a total of Rs. 408.19 lakh soil
health cards (SHC) issued to farmers .Funds
amounting Rs. 16.90 crore has been
released to implementing agencies during
2010-11 for different components under
NPMSF Scheme.
Government is also encouraging use of
fortified fertilizers. So far 10 (ten) such
fertilizers have been included in Fertilizer
Control Order (FCO). Customized fertilizers
f o r p r o m o t i n g s i t e s p e c i f i c n u t r i e n t
management to achieve maximum fertilizer
use efficiency of applied nutrient in a cost
effective manner are also being encouraged.
These fertilizers are soil specific and crop
specific and are formulated on the basis of
soil testing results. So far, 36 such fertilizers
have been notified under Clause 20B of FCO.
To ensure quality of organic inputs, 5 bio-
fertilizers viz. Rhizobium, Azotobacter,
Azospirillum, Phosphate Solubilising micro-
organism and Mycorrhizal Bio-fertilizer and
two organic fertilizers, namely city compost,
vermin-compost and de-oiled castor cake
were notified under FCO. 1,228 samples of
bio fertilizers and 271 samples of organic
manures were analyzed for quality control.
1,465 mother culture strains of different
microorganisms were supplied to various bio-
fertilizers production units in the country. To
ensure access of organic quality assurance
system to small and marginal farmers (at
practically no cost), a farmers group centric
organic guarantee system known as
Participatory Guarantee System (PGS) has
been launched. Government is also
educating farmers through training and field
demonstrations on balanced use of fertilizers
for improving soil fertility and its productivity.
It also aims at strengthening soil testing
facilities, upgrading the skill of staff working in
soil testing laboratory and strengthening the
fertilizer quality control facilities. As per the
above said scheme, the following amounts of
subsidy is to be provided by Department of
Agriculture & Cooperation for STL.
Sl. No.
Particulars
Policy
1.
For Setting up of additional Soil Testing Labora tories by Agri clinics/NGOs /Cooperative, entrepreneurs, etc.under Private partnership mode.
@50% of project cost limited to maximum of „ 30 lakh as one time subsidy.
2. For Adoption of village by Soil Testing Laborato ries through Frontline Field Demonstration.
@ Rs. 20000 per Frontline Field Demonstration.
3. For Setting up of Mobile Soil Testing Laboratori es by Agri Laboratories by Agri clinics/NGOs/Cooperative, Private entrepreneurs, etc. under Pvt. partnership mode.
@ 75%of project cost limited to maximum of „ 30 lakh as one time subsidy.
62 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
Year New
Static STLs (Nos)
New
Mobile STLs (Nos)
Strengthening of
existing STLs (Nos)
New
FQCLs (Nos)
Strengthening of
existing FQCLs (Nos)
2008-09 42 44 39 2 19
2009-10 66 62 107 11 19
2010-11 16 10 9 1 1
2011-12 (as
on 13/12/2011 0 2 10 1 0
Total 124 118 165 15 39
Sl. No Fertilizer Company Year 2009-10
1. FCI Arawali Gypsum and Minerals India Ltd. 2. Gujarat Narmada Valley Fertilizers Company Ltd. 3. Gujarat State Fertilizers & Chemicals Ltd. 4. Indian Potash Ltd. 5. Krishak Bharati Cooperative Ltd. 6. Mangalore Chemicals & Fertilizers Ltd. 7. Rashtriya Chemicals & Fertilizers Ltd. 8. Southern Petrochemical Corpn. Ltd. 9. Zuari Industries Ltd.
Year 2010-11 10. Indo Gulf Fertilizers 11. National Fertilizers Limited 12. The Fertilizers & Chemicals Travancore Ltd.
8.1.4 Up to 2010-11, 4.08 crore soil health cards submitted proposals of fertilizer companies
have been issued by the State Governments for setting up soil testing laboratories, training
for balanced and judicious use of fertilizers. and demonstration on balanced use of
Ye a r - w i s e n u m b e r o f S o i l Te s t i n g fertilizers to the Department of Agriculture &
Laboratories (STLs) and Fertilizer Quality Cooperation. The proposals of the following
Control Laboratories (FQCLs) sanctioned twelve fertilizer companies have been
under the scheme are given in table below:- approved by the Department of Agriculture &
Cooperation during 2009-10 and 2010-11:
8.1.5 As a follow up on the recommendation of the
Standing Committee on Chemicals &
Fertilizers (2009-10) on Fertilizer Education
Projects, the Department of Fertilizers
*****
ANNUAL REPORT 63
CHAPTER -9
9.1 INFORMATION TECHNOLOGY (IT) Urea manufacturers to the consumption
centers across the country. The processing 9.1.1 E-DELIVERY FOR FERTILIZER MANAGEMENT
Fertilizer Managemenlt On-line has been
developed in Department of Fertilizers in
close collaboration with National Informatics
Centre to meet the nation objective of making
fertilizers available timely, adequately in good
quality and at affordable price to the farmers
by maintaining growth of fertilizer industry
through subsidies/concession. Proper
planning and monitoring of various aspects
like fertilize production, imports, quality
control, distribution, movement, sales,
stocks, subsidies and concessions has been
felt essential. In order to manage these
issues effectively, the following applications
systems have been developed /upgraded in
order to pace with the IT enhancements and
change in fertiizer policy:-
9.1.4
of monthly claims through application system
helps in timely release of subsidy to the urea
manufacturers. The system helps in
monitoring various activities pertaining to the
payment of subsidy by generating various
periodic reports as well as query retrieval.
APPLICATION SYSTEM FOR MONITORING
ENERGY CONSUMPTION NORMS
The system is used to calculate the overall
energy consumption in urea production by
plants based on various inputs and their
calorific values purchased from various
sources and consumed in ammonia
production. The system provides information
support to monitor operational performance
of the plants viz., daily reassessed capacity,
average productive hours, and daily
production rate and capacity utilization of
9.1.2 WEB BASED FERTILIZER PRODUCTION
MONITORING SYSTEM
The application system facilitates On-line
data entry and provides information support
for planning and monitoring the fertilizer
production I the form of material as well as
nutrients. The system provides analysis in
identifying the macro and micro level factors
responsible for deviations in production in the
country. The system cover various aspects
viz., installed capacity, production targets,
actual production, capacity utilization,
requirement and consumption of raw
materials/intermediates for fertilizer plants.
9.1.3 F E R T I L I Z E R S U B S I D Y PAY M E N T
INFORMATION SYSTEM
The system is used to compute the subsidy
amount based on the subsidy rates, equated
freight rates and sales tax rates notified by the
Government for the quantity moved by the
ammonia / Urea. The system also maintains
consumption and balance of ammonia for
each quarter.
9.1.5 APPLICATION SYSTEM FOR REVISION IN
UREA CONCESSION RATES
The System facilitates in quarterly revision of
concession rates for urea manufacturing
units in each group under group concession
scheme on account of escalation/de-
escalation in the variable cost of various
inputs and utilities consumed in urea
production. The software derives energy
consumption proportions of various inputs
w.r.t. the total normative energy and
computes input wise proportional costs. The
total input energy cost, normative costs of
various utilities and fixed cost are then
summed to arrive at the rate of concession.
The total financial impact is exercised w.r.t.
the previous rate of concession and
dispatched quantities.
64 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
9.1.6 WEB BASED FERTILIZER DISTRIBUTION
AND MOVEMENT INFORMATION SYSTEM
The system maintains the data related to ECA
supply plan, fertilizer requirements in
Sates/UTs, opening stocks with state
i n s t i t u t i o n a l a g e n c i e s a n d f e r t i l i z e r
companies, monthly movement orders,
i m p o r t s , d i s p a t c h e s ( r e g u l a t e d / d e -
regulated/imported by rail/road), availability
and sales of different fertilizers.
9.1.7 WEB BASED FERTILIZER CONCESSION
SCHEME MONITORING SYSTEM
The computer based application system is
the major integral process of Fertilizer
Concession Scheme for timely release of
concession payments to the fertilizer
manufacturers and importers for the sales of
indigenous/ imported phosphatic and
Potassic fertilizers in Stats/UTs. The monthly
claims at various stages i.e. 'On Account',
'Differential' and 'Balance' are processed
using the software based on base/final rates,
regist4ration for sales, certification. The
computerized noting for approval and
sanctions for payments to PAO, Expenditure
and Control Register (ECR) and various
queries/reports are generated to make and
monitor the concession payments.
9.1.8 W E B B A S E D F E R T I L I Z E R I M P O R T
MANAGEMENT SYSTEM
The system assists in monitoring the fertilizer
Import Plan based on actual imports against
targets, status of FOB and C&F import
contracts for prilled urea on Government
account under ECA demand and import of
granular urea from OMIFCO under UOTA.
The system also maintains details of
Department of Fertilizer's authorization to
State Trading Enterprises (STES)/ Handling
& Marketing Agents for import of urea during a
scheduled period.
9.1.9 WEB BASED HANDLING & PAYMENTS
SYSTEM FOR FERTILIZER IMPORTS
The application system provides decision support to the Department of Fertilizers in selecting handling agents, fixation of handling
rates and monitoring of expenditure. The system processes the claims from handling/ marketing agents towards making payments of inland freight and handling charges after adjusting the recovery of cost of cargo at Pool Issue price (PIP) from handling/ marketing a g e n c i e s , s e t t l e m e n t o f t h e p o r t dues/ICC/other charges and demurrage /dispatch with handling/marketing agencies.
9.1.10 FERTILIZER PROJECT MONITORING
SYSTEM
The system facilitates in monitoring monthly
expenditure incurred through Internal and
Extra-budgetary resources (IEBR) and
Budgetary Support on various schemes/
projects approved by DoF during Five Year
Plans w.r.t. plan outlays and yearly outlays.
9.2 EXECUTIVE VIDEO CONFERENCING
SYSTEM (EVCS)
N I C N E T B a s e d E x e c u t i v e V i d e o
conferencing system (EVCS) has been made
operational in the desk of Secretary,
Department of Fertilizers and is being used as
an effective mode of communication for inter-
Ministerial consultations and quick decision
making. Point-to-Point Video conferencing
can be initiated by anyone connected to
EVCS and multi-point Video conferencing
can be organized through NIC, Delhi.
9.3 INFORMATION & COMMUNICATION
TECHNOLOGY (ICT) INFRASTRUCTURE
DoF's intranet consisting of 270 nodes is
operational in Departments' offices located in
Shastri Bhawan, Udyog Bhawan, Janpath
Bhawan and Sewa Bhawan. NIC's iNoc
(Integrated Network Operation centres) at
Shastri Bhavan, Udyog Bhavan and Sewa
Bhavan protect computer systems of DoF's
intranet from network security attacks.
The clients systems in the Department have been provided upto LDC level with internet connectivity to make wider use of IT services. For accessing and internet through RF link of NICNET, all the computers are connected through NIC's proxy server where built-in firewall capabilities are enabled.
ANNUAL REPORT 65
9.4 WEB SITE/WEB APPLICATIONS HOSTING
The website of DoF and fertilizer PSUs are
hosted at Internet Data Center(IDC), NIC
Hqrs. In a secured ICT environment to bring
citizen interface and transparency in
Government functioning. The web based
applications for fertilizer production,
movement, concessions payment, imports &
handling are operational from IDC. The
remote facility through secured Virtual Private
Network (VPN) connection of NIC is being
used in DoF and Fertilizer PSUs for instant
updations in the websites.
Cabinet Secretary to the Government of India
directed all Government Ministries /
Departments to have their websites as per the
g u i d e l i n e s a d o p t e d b y D A R & P G .
Accordingly, the website of Department of
Fertilizers has been redesigned and enriched
in order to make it compliant to the guidelines.
The website has been made more qualitative,
informative and user friendly to bring
transparency in Government functioning and
citizen interface.
9.5 INTRAFERT PORTAL
IntraFERT, an Intranet portal has been
developed to provide comprehensive,
accurate, reliable and one stop source of
information to the staff and officers of the
Department of Fertilizers. The portal aims in
bringing less paper office environment in the
department. It facilitates a common
information platform whereby, all office
orders, circulars, critical news-updates,
downloading of standard forms, telephone
directory of DoF, electronic pay-slip
generation, personal profile, GPF details,
income tax statement etc. and links to useful
w e b s i t e s a r e a v a i l a b l e e q u a l l y a n d
instantaneously to all employees. This
eliminates the requirements of personal visits
to HR, Cash and Administration Sections.
9.6 MOBILE BASED FERTILIZER MONITORING SYSTEM (mFMS)
Consequent to the budget announcement of the
Finance Minister regarding the transfer of
direct subsidy to the farmer , the DOF had
initiated action for tracking the sale of fertilizers
to the farmers. The National Informatics Centre
( NIC) has been mandated with the task of
development of the software to track further
movement of the fertilizers from the district as is
available in the FMS to the retailers, so that the
information availability at the last point of sale to
the farmer is visible in the public domain.
Thereafter, the system will be extended to
capture the sales to the farmer. The
Government has also appointed a Task Force,
under the Chairmanship of Shri Nandan
Nilekani, Chairman,UIDAI, to suggest an
implementable solution for the transfer of direct
subsidy to the farmer. The mandate of the Task
Force is to recommend and implement a
mechanism for transfer of direct subsidy in
fertilizers, including, inter-alia, to identify and
suggest the required changes in the existing
systems, processes and procedures, IT
frameworks and supply chain management.
The Task Force is also to oversee and evaluate
the implementation of the solutions proposed
on pilot basis through the concerned
implementing Ministries.
T h e Ta s k F o r c e h a s r e c o m m e n d e d
implementation of examining the feasibility of
direct subsidy to intended beneficiaries in three
phases. Phase-I on information flow would
extend the information collection to the retailer
level on both , receipt and sales. Phase-II on
subsidy to the retailer would deal with the
transfer of subsidy directly to the retailer on
receipt of fertilizers. Phase-III on subsidy to the
farmer deals with the transfer of subsidy to the
farmer and will be done only after the
stabilization of Phase-II and on the availability of
policy details on the intended beneficiaries.
9.7 E-GOVERNANCE
9.7.1 Department of Fertilizers has taken various
measures to bring e-Governance:
· Office Automation Packages: CompDDO
(Comprehensive Function Management of
Drawing & Disbursing Officer) Payroll System
66 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
for Central Government Offices, Web based
File Tracking System, Application Monitoring
System under RTI Act, Leave Management
System, CPGRAMS (Centralized Public
Grievances Redress and Monitoring System)
and CPENGRAMS (Centralized Pension
Grievance Redress and Monitoring System)
developed by NIC in collaboration with
DARPG are operational in the Department of
Fertilizes.
· To strengthen further the Office Automation in
Department of Fertilizers, an IT based system
“Office Notifications Management System”
has been developed and implemented to
generate, store and manage different kinds of
official letters viz. Office Memorandum,
Letters, Office Orders, Orders, D.O. Letters,
Resolutions, Inter-Departmental Notes,
Press Communiqués etc in compliance of
Manual of Office Procedures (MOP).
· The facility of work processing in Hindi is
available in all the computers in the
Department.
· E-mail service is being extensively used by
the officials of Department of Fertilizers for i n f o r m a t i o n e x c h a n g e w i t h f e r t i l i z e r companies and other agencies.
9.7.2 I M P L E M E N TAT I O N O F E - O F F I C E
MISSION MODE PROJECT IN THE
DEPARTMENT
` The Department of Administrative Reforms
and Public Grievances has taken up a project
for implementation of e-office (paperless
office) in Government Departments. The
Department of Fertilizers has been identified
as one of the Departments for implementing
e-office. Under the Project the DARPG is
providing technical support and training to
staff through IC and the Department is
p r o v i d i n g i n f r a s t r u c t u r e r e q u i r e d f o r
implementation of the project. It is expected
that the E-office project will function in the 1st
month of next financial year. With the
implementation of the E-office mission mode
project there will be considerable reduction in
the paper work, expedite decision making
and transparency.
*****
ANNUAL REPORT 67
CHAPTER -10
VIGILANCE ACTIVITIES C E L E B R A T I O N S O F V I G I L A N C E
10.1 The vigilance activities of the Department AWARENESS WEEK
extend not only to the Department but also to 10.3 The 'Vigilance Awareness Week' was
that of 7 Public Sector Undertakings and 1 celebrated in this Department from 31st
Multi State Cooperative Society. The
Vigilance Division of the Department is
headed by the Joint Secretary who is
designated as the Chief Vigilance Officer
October 2011 to 5th
November 2011. Banners
were displayed in the Department to create
vigilance awareness among the staff A
pledge was administered to the staff by
10.2
(CVO) in the Department. The CVO is
assisted by Deputy Secretary, Under
Secretary and other vigilance staff. The
Department supervises the vigilance
activities within the framework provided by
the Central Vigilance Commission (CVC).
The Department plays pro-active role in
ensuring the prompt disposal and in framing
preventive guidelines. This helps in
minimizing the occurrence of vigilance cases.
Efforts are being made by the Department to
simplify the procedures in the PSUs to
promote transparency in their working. This
reduces the chance of corruption
VIGILANCE ACTIVITIES DURING 2011
T h e n u m b e r o f p e n d i n g v i g i l a n c e
(Disciplinary Proceeding) cases in the PSUs
was 34 as on 31.12.2011. The Department
has been regularly monitoring the pending
complaints/investigations by having close
inter-action with the concerned CVOs of
PSUs and constant efforts are being made to
e n s u r e t h e d i s p o s a l o f d i s c i p l i n a r y
proceedings.
10.4
10.5
Secretary (Fertilizers) and an essay
competition was held thereafter. There was
active and enthusiastic participation of the
officers and employees of the Department in
this Essay Competition. The 'Vigilance
Awareness Week' was also celebrated with
great gusto in the PSUs and KRIBHCO and
various competitions like slogan writing,
Essay, Debate, Quiz, Workshops etc. were
held.
SURVEILLANCE AND DETECTION
Agreed list of public servants as well as List of
Public Servants of Doubtful Integrity for the
year 2011 have been finalized.
PUNITIVE ACTION
As on 1st
January 2011, 35 complaints from
various sources against the officials of PSU's
were under examination. During the period
from 1st
January 2011 to 31st
December 2011,
17 complaints were received in the
Department. A total of 18 complaints were got
investigated/ examined and disposed off.
*****
68 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
CHAPTER -11
11.1 RIGHT TO INFORMATION ACT, 2005 B. Orders designating PIOs, with required
11.1.1
The Right to Information /act, 2005 (RTI) was
assented by the President of India on
15.6.2005 and notified on 21.6.2005. Some
of the /Sections of the Act, namely, Sections
4(1), 5(1) & (2),12,13,15,16,24,27 & 28
relating to obligations of Public Authorities for
maintenance and computerization of
record/information, designation of Public
Information Officers(CPIO), constitution of
Central Information commission and State
information Commission, exclusion of certain
details, placed on website, which are up
dated from time to time.
C. Counter opened at Public Information Centre
of DoF at Shastri Bhavan for application as
well as prescribed fee under RTI.
D. Appointment of Nodal Officer intimated to
Department of Post enabling providing of
services by that Department as CAPIOs
across the country.
o r g a n i z a t i o n e t c . c a m e i n t o f o r c e
immediately. The remaining provision of the
RTI act came into force on the 120th
day of its
enactment i.e. 12th
October 2005.
11.1.2 In compliance of the RTI Act the Department
has designated CPIOs and CAPIO. The
respective PSUs under the administrative
control of the Department have been directed
to ensure compliance of the RTI Act. Some of
the important steps taken by the Department
in compliance of the Act are:-
A. Created a separate link for RTI Act on its
website http://fert.nic.in placing a handbook
on RTI giving general information about the
Department required under the Act.
11.1.3
11.1.4
The Department has started registration of
applications and appeals under the RTI Act on
the Management Information System (RTI-
RAMIS) software available on the Web-Site of
CIC.
During the year 2011-2012, 195 applications
and 8 appeals were received of which 181
applications and 7 appeals were disposed of,
in time, during the said year. 9 applications
were rejected for not being accompanied by
requisite fees in the prescribed manner, as
per the RTI Act. Remaining applications and
appeal are under process and reply would be
sent to the applicants in time.
*****
ANNUAL REPORT 69
CHAPTER -12
12.1 PROGRESSIVE USE OF OFFICIAL
LANGUAGE HINDI
in Hindi to Central Government offices
located in Region 'A', 'B' and 'C', action plan
12.1.1
12.1.2
Department of Fertilizers continued its efforts
towards greater use of Hindi in official work
during 2011-2012 keeping in view the Annual
Programme issued by the Department of
Official Language, Ministry of Home Affairs
for implementation of the Official language
policy of the Union. The work pertaining to
the progressive use of Hindi in the
Department is under the administrative
control of Joint Secretary (Administration),
assisted by a Deputy Director (OL). The Hindi
Section consists of one Assistant Director
(OL), a Senior Translator, three Junior
Translators and one Assistant.
All the 205 Computers (PCs) and 10 Laptops
in the Department are equipped with bilingual
facility. Adequate reading material in Hindi
has been made available in the library of the
Ministry of Chemicals & Fertilizers. Continue
Efforts are being made to promote the use of
Hindi in the correspondence. During the year
Two Assistants and one lower Division Clerk
of the Department have been trained in Hindi
Typing. Besides, a number of measures
have been taken for the promotion of
progressive use of Hindi in the Department,
its attached office of FICC and PSU's under
its administrative control. Details of these
measures are summarized below:-
based on the checkpoints identified in the
Department has been prepared to ensure
compliance of the official language policy. All
the letters received in Hindi are invariably
replied to in Hindi. Efforts are also being
made to reply the letters in Hindi which are
received in English from region 'A' & 'B'
Original correspondence in Hindi with the
state govt. is also being increased.
12.3 OFFICIAL LANGUAGE IMPLEMENTATION
COMMITTEE (OLIC)
There is an Official Language Implemen-
t a t i o n C o m m i t t e e ( O L I C ) u n d e r t h e
Chairmanship of Joint Secretary (Adm.) in the
Department. This committee regularly
reviews the progress made in the use of Hindi
in the Department, its attached offices, FICC
and PSUs on quarterly basis. It gives
appropriate suggestions and recommends
measures to be taken for the effective
implementation of the official language policy.
12.4 HINDI SALAHKAR SAMITI
With a view to render advice for effective
implementation of the official language policy
of the Government, the Hindi Salahkar Samiti
(Advisory Committee) of the Ministry of
Chemicals and Fertilizers (Department of
Chemicals, Deptt. of Pharmaceuticals and
the Department of Fertilizer has been 12.2 IMPLEMENTATION OF SECTION 3(3) OF
THE OFFICIAL LANGUAGE ACT
In pursuance of the official language policy of
the Govt. of India, all documents covered
under section 3(3) of the Official Language
Act, 1963 are being issued both in English
and Hindi. In order to ensure correspondence
reconstituted. Joint Secretary (A&M)
Department of Fertilizers, is the Joint Member
Secretary of this committee. The Meeting of
the Committee held on 10t October, 2011 in
Port Blair under the Chairmanship of the
Minister of State for Chemical and Fertilizers.
The members of Parliament, Non-Official
70 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
Members, Government officer Members and
the Heads of the PSU's under the
Department were present in the Meeting.
The Hon'ble Minister expressed his pleasure
for the work of Official Language Hindi being
done in all the three Deptts. of the Ministry viz.
Chemicals and Petro-Chemicals, Deptt. of
Pharmaceuticals and Deptt. of Fertilizers and
all the PSU,s under them. He also advised to
Language is continued. This scheme carries
One prize of Rs.1000/- each, Two second
prizes of Rs.600/-600/- each and Two third
prizes of Rs.300/- 300/-each.
12.6 HINDI DAY/HINDI FORTNIGHT
In order to encourage the use of Hindi in
official work amongst officers/employees of
the Department, an appeal was made by the use simple and day-to-day used words and Honourable Minister on 12
th September,
take forward the work of dissemination of the
Official language Hindi: 2011. During the Hindi fortnight, which
wasorganised in the Department from 12th
Hon'ble Union Miniter of State for Chemicals & Fertilizers, Shri Srikant Kumar Jena presiding over the meeting of the Hindi Salahkar Samiti of the Ministry of Chemical & of Fertilizers.
12.5 INCENTIVE SCHEME FOR ORIGINAL
NOTING/DRAFTING WORK IN HINDI
The incentive scheme for noting/drafting in
Hindi introduced by the Department of Official
September, 2011 to 26th
September, 2011,
various competitions such as Hindi
Essay writing, Hindi typing, short
extempore speech in Hindi, noting and
ANNUAL REPORT 71
drafting in Hindi, Hindi general knowledge
and poem recitation competitions in Hindi
were organised. On 14th November, 2011
p r i z e s w e r e a w a r d e d b y S e c r e t a r y
(Fertilizers) to those participants who scored
first, second, third prizes and consolation
prizes viz. Rs. 2500/-, Rs. 2000/-, Rs. 1500/-
& Rs. 1000/- in these competitions (Three
consolation prizes each in Hindi Essay &
Hindi Noting & Drafting competitions, two
prizes each in Hindi Typing, Poem recitation,
Hindi Stenography and General Knowledge
Competitions) alongwith certificates.
12.7 PRATI DIN EK SHABD
The Scheme named 'Prati Din Ek Shabd', is
being run in the Department, that continued
this year also Under this scheme, one
word/phrase in Hindi and its English
equivalent was being displayed on the White
Board installed on the second floor 'A' wing
Shastri Bhavan. These words/phrases are
generally of administrative and technical in
nature which are used in day-to-day official
work.
12.8 HINDI WORKSHOPS
During the year, 3 Hindi workshops, one for
Section Officers, one for Assistants and
Stenographers and one for LDC's & UDC's,
were organised in the Department to
encourage the officials to do more and more
w o r k i n H i n d i a n d a l t o g e t h e r 3 0
officers/employees participated in these
workshops. One of these workshop included
officers/employees trained to do their work in
Hindi on computed based system.
12.9 INSPECTIONS REGARDING PROGRES-
SIVE USE OF HINDI
In order to oversee the implementation of the
official language policy of the 4 PSUs under
the administrative control of this Department
were inspected by the Deputy Director (O.L.)
of the Department during the year. In addition,
the first Sub-Committee of the Parliamentary
Committee on Official Language inspected
six office under the administrative control of
the Department.
*****
72 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
CHAPTER -13
13.1 WELFARE OF SCS, STS, OBCS AND
PHYSICALLY HANDICAPPED PERSONS
Due care has been exercised during the year
under review to implement Government's
instructions regarding recruitment and
promotion of candidates belonging to the
Scheduled Castes (SCs), Scheduled Tribe
(STs), Other Backward Classes (OBCs) and
Physically Handicapped (PHPs) categories
in various groups of services in the
Department. The representation of these
categories in the Department as on date is as
under:-
Group Total No. of
Officers/Staff
SC ST OBC PH
A 39 03 01 01 -
B 105 17 05 07 01
C 105 27 05 11 01
Total 249 47 11 19 02
13.2 REPRESENTATION OF SCS, STS, OBCS
A N D P H Y S I C A L LY H A N D I C A P P E D
PERSONS IN PSUS
Presidential Directives on reservation for the
concerted efforts are being made to fill up the
vacancies for the reserved categories. The
representation of SCs, STs, ex-servicemen,
physical handicapped persons and OBCs in
the PSUs is given in the Annexure-XIII.
Besides providing employment, PSUs have
been advised to prepare and implement
special programmes/schemes for education
of tribal in scientific use of fertilizers, building
up of dealer/retailer network in the tribal
areas, and making fertilizers available in
small packs in the tribal predominated area.
13.3 WELFARE OF MINORITIES
The PSUs under the Department have further
been advised to provide facility of pre-
examination coaching to the candidates of
minority community, wherever feasible, and
to take steps to increase awareness of
candidates belonging to the communities
about employment opportunities. They have
also been advised to include a representative
of the minorities in the recruitment selection
boards to ensure that the minorities get an
adequate share in the services and benefit
from development schemes.
13.4 RESERVATION IN DEALERSHIP
candidates belonging to the SCs and STs
issued from time to time by the Department of
Public Enterprises (DPE), have been
implemented in all the PSUs under the
administrative control of the Department.
The Presidential Directives regarding
reservation for OBCs have also been made
applicable w.e.f. 8.9.93 in the Department.
13.4.1
The Department had instructed all the PSUs
under its administrative control to reserve at
least 25% of dealerships of fertilizers for the
members belonging to SCs/STs. To ensure
availability of sufficient numbers of suitable
SC/ST candidates, the following concession
are generally given by the undertakings:
The implementation of these directives is
being monitored in the Department and
· Exemption/relaxation from security
deposits.
ANNUAL REPORT 73
· Preference in supply of fast moving · Free training for handling of fertilizers.
materials.
13.4.2
The PSUs have also been advised to reserve
· Higher rate of dealership margin as
compared to that allowed to general
dealers; and
10% of fertilizer dealerships for ex-
servicemen.
*****
74 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
CHAPTER -14
14.1 WOMEN EMPOWERMENT
The principle of gender equality is enshrined
in the Indian constitution in the Preamble,
Fundamental Rights, Fundamental Duties
and Directive Principles. The constitution not
only grants equality to women but also
empowers the State to adopt measures of
positive discrimination in favour of women.
The Department of Fertilizers is committed
towards giving importance to women in
different spheres. Though there is not
specific scheme, as such, for women, the
PSUs under its administrative control are
involved in year long activities to create large
scale awareness among women with their
active participation. These programmes are
aimed towards enabling women to realize
their full potential and involvement in decision
making. Department of Fertilizers has a
“Complaints Committee” to attend to
grievances of its women employees.
Department has also allocated a separate
room for women to serve as common room.
The Department takes pride in providing
c o n g e n i a l e n v i r o n m e n t t o w o m e n
employees.
14.2 RCF
14.2.3
Ø
Ø
Ø
14.2.4
14.2.5
All the welfare and employee benefit
schemes are equally applicable to male and
female employees of RCF.
Under the special schemes and policies for
women employees RCF has set up –
Special Cell for Women Employees (as per
Communication from National Commission
on Women)
Committee for Sexual Harassment Cases (as
per Supreme Court Guidelines)
Special Medical check-ups/camps.
All the benefits under legal requirements
such as Maternity Benefits, Nursing Breaks,
etc. are given to women employees.
RCF is one of the pioneer members in the
Forum of Women in Public Sector (WIPS)
since its inception (1990). It is a corporate
member of this forum and has been
representing in all activities of the forum with
total support and participation in all activities.
Some RCF women officers have been
working with the forum as heads of
taskforces, members of committees and
have contributed in policy making and
development of women to a great extent.
14.2.1 RCF as an organization has always been fair
in treating employees without any gender
bias. Opportunities for growth, training,
challenging jobs, learning are equally
available to both men and women employees
of RCF. Women represent in fair numbers in
14.2.6
As a part of regular training, RCF
incorporates awareness building for all
officers (Men and Women) on the Sexual
Harassment Guidelines and also covers
gender sensitization issues.
the batch of apprentice trainees in technical 14.3 NFL 14.2.2
areas.
Women are working in technical / non-
technical / managerial positions and some of
them have risen to the level of top
management positions in the organization.
14.3.1
Female employees comprise 5.3% of the
total workforce of the Company. The
Company has a female Full-time Functional
Director on its Board. The Company has
adopted adequate measures to facilitate a
ANNUAL REPORT 75
14.3.2
congenial work atmosphere for its women
employees.
There is no instance of any Gender inequality
and both men and women employees are
e n j o y i n g e q u a l r i g h t s . T h e w o r k i n g
atmosphere is very cordial and harmonious.
e m p o w e r m e n t o f w o m e n a n d f o r
mainstreaming gender issues.
14.7 FACT
14.7.1 Employment of women employees in
FACT and their profile
14.4 MFL
MFL do not have any problems for
mainstreaming gender issues and all the
women employees are being involved in all
the activities. Further, MFL is having a
separate Women's Forum affiliated to
“Women in Public Sector (WIPS)” and there
is a women coordinator from MFL nominated
for this purpose for coordinating the activities
and promoting the interests of women
employees relating to their welfare ,
development and empowerment. Every year,
MFL is conducting “Women's Day” and
almost all the women employees are
participating in the programmes / events.
Last year 2010-11, on March 15, MFL
conducted Women's Day in a grand manner.
14.5 BVFCL
Equal opportunity has been provided to
women in recruitment to posts both in
technical and administrative disciplines.
Exception has been made only for jobs
involving shift-work round the clock. Equal
remuneration is paid to employees of both
genders doing the same type of work. There
is no discrimination on grounds of gender.
This has enabled some of our women officers
to excel in their respective field of activities
leading to their being chosen for the coveted
M e r i t A w a r d g i v e n f o r o u t s t a n d i n g
performance and achievements.
Women executives occupy key positions in
the Management cadre as Deputy General
Managers/ Chief Managers/ Chief Engineers
& Dy. Chief Managers/ Dy. Chief Engineers in
v a r i o u s E n g i n e e r i n g d i s c i p l i n e s l i k e
14.5.1
14.5.2
BVFCL lays emphasis in development of
e m p l o y e e s w i t h o u t a n y g e n d e r
discrimination. There is no discrimination
against Women employees. Adequate
healthcare provided for the welfare of the
Women.
Emphasis is given at the time of recruitment
and many women candidates have been
recruited in recent past. As per the directives
of the Controlling Ministry, a committee
headed by a Lady Officer is constituted to
address any problem related to sexual
harassment. Till date no such case has been
received.
Chemical, Electrical, Civil, Computer,
Industrial Engineering etc. and administrative
disciplines like Finance, Human Resources,
Materials, Marketing etc.
14.7.2 Statutory Welfare Measures implemented
for Women employees.
Under the Maternity Benefit Act, women
employees are entitled for maternity leave of
90 days and medical benefits associated with
pregnancy, delivery, miscarriage etc. Under
the provisions of the Factories Act, the
working hours of women employees covered
under the Act is restricted between 6 am and
7 pm. Nursing mothers are given two 14.6 FAGMIL
As such, the company is a new Company and
is engaged in the business of mining in the
desert areas of Rajasthan. Suitable
measures will be taken for the welfare and the
*****
intervals of 15 minutes each as feeding time,
or alternatively as a working arrangement of
30 minutes at a stretch, for feeding their
infants, up to a maximum of fifteen months
after confinement.
76 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
As per GOI Orders, women employees
undergoing family planning operation are
given special leave up to 2 weeks. A crèche is
also provided for the welfare of women
employees.
14.7.3 Non-statutory Welfare measures imple-
mented
The Company sponsors a Ladies Club for the
recreational activities of women employees
and wives of male employees. There is also
an association of women employees, by the
name FACT Women' Welfare Association,
whose activities are welfare oriented.
14.7.4 Security at Work
Based on the GoI Orders, there is a full
fledged and active complaints Committee to
look into complaints of atrocities/harassment
meted out to women employees at work
place. Not less than half the members are
women including an external member who is
a lady Professor of a reputed Social Work
College.
*****
ANNUAL REPORT 77
CHAPTER -15
CITIZEN CHARTER/GRIEVANCE REDRESSAL
MECHANISM
Citizen Charter
Department of Fertilizer has created a
Sevottam complaint Citizens'/Clients'
Charter for the year 2011-12 as well as
Sevottam Complaint Grievance Redress
Mechanism under Results Framework
Document (RFD) of the Department. The
Citizen Charter of Fertilizer Industries
Coordination Committee (FICC), which is an
attached office of Department of Fertilizers, is
under preparation.
Our Mission
Achieving fertilizer security for the country for
sustainable agricultural growth supported by
a robust domestic fertilizer industry.
Our Vision
Ensuring adequate and timely availability of
fertilizers to the farmers at affordable prices
through planned production and imports and
distribution of fertilizers in the country and
planning for self-sufficiency in Urea
production.
Stake Holders
The following are our stake holders;
· All PSUs under the Administrative Control of
DoF
· All other Fertilizer Producing Companies
· Department of Agriculture and Cooperation
· State Governments
· Importers of Fertilizers (Urea, MOP,
Complexes)
· Importers/Raw material suppliers · Other Ministries (Ministry of Finance, Ministry
of Petroleum and Natural Gas, Ministry of
Railways, Ministry of Surface Transport,
Planning Commission, Department of Public
Enterprise, Public Enterprises Selection
Board, Tariff Commission, DGFT etc.
Grievance Redressal Mechanism
With an objective of speedy redressal,
e ff e c t i v e m o n i t o r i n g o f g r i e v a n c e s ,
Department of Fertilizers (DOF) has
implemented an integrated application
system based on web-technology prepared
a n d d e v e l o p e d b y D e p a r t m e n t o f
A d m i n i s t r a t i v e R e f o r m s a n d P u b l i c
Grievances and national Informatics Centre
called Centralized Public Grievance Redress
and Monitoring System (CPGRAMS) through
which citizens can submit their grievances
from anywhere and anytime for easy
communication between DoF and citizens.
The system provides the on-line facility to the
citizen to monitor the progress of redressal
process in respect of grievance lodged by
them. The system provides link between
DoF and offices under its control. The
grievances are forwarded to concerned
division of DoF, its attached office and PSUs
under the control of the Department for action
in a time-bound manner. Disposal of
grievances is followed up by sending
reminders at various levels at regular
intervals. The grievances received by post
are also properly recorded and redressed in a
time bound manner.
*****
78 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
ANNEXURES
ANNEXURE-1
LIST OF ACTIVITIES BEING CARRIED OUT BY DEPARTMENT OF FERTILIZERS
1. Planning for fertilizer production including import of fertilizer through a designated canalising
agency.
2. Allocation and supply linkages for movement and distribution of urea in terms of assessment
made by the Department of Agriculture & Cooperation.
3. Administration of concession schemes and management of subsidy for controlled as well as
decontrolled fertilizer including quantum of concession of decontrolled fertilizers, costing of such fertilisers and pricing of Phosphatic and Potassic fertilizers.
4. Administration of the Fertilizer (movement Control) Order, 1960.
5. Policy and pricing matters relating to urea.
6. All matters pertaining to fertilizer PSUs including matter related to their disinvestment.
7. All matters pertaining to Fertilizer Projects, Joint Venture/Joint Sector companies.
8. External assistance for new fertilizer projects.
9. Matters relating to Fertilizer Industry Coordination Committee (FICC), an attached office of
DoF, which is concerned with cost aspects of urea production and disbursement of subsidy on indigenous urea.
10. Matters connected with supply and availability of fertilizer raw material and marketing of
fertilizers.
11. Fixation of remuneration rate for handling imported fertilizers.
12. Work relating to planning, monitoring and valuation of fertilizer production.
13. All matters relating to WTO in the fertilizer sector.
ANNUAL REPORT 81
ANNEXURE-II
LIST CONTAINING THE NAMES OF MINISTER-IN-CHARGE AND THE OFFICERS OF THE LEVEL OF DEPUTY SECRETARY AND ABOVE, WHO HAVE WORKED IN THE DEPARTMENT DURING 2011-2012
Minister for Chemicals & Fertilizers : Shri M.K. Alagiri
Minister of State for C&F : Shri Srikant Kumar Jena
Secretary : Dr. Sutanu Behuria (upto 01.11.2011)
Sh. Ajay Bhattacharya (w.e.f. 02.11.2011)
Additional Secretary & Financial Adviser : Dr. V. Rajagopalan
Joint Secretary : Shri Sham Lal Goyal
Shri Satish Chandra
Shri S. C. Gupta (w.e.f. 17.05.2011)
Joint Secretary Level Officers : Shri A.K. Parashar, Economic Adviser
: Shri M.P. Johnson, DDG
Directors : Shri Deepak Kumar
Shri B.B. Mehtani (upto 31.10.2011)
Shri Sanjay Kumar Sinha
Director Level Officer : Smt. T.C.A Kalayaani (Director of Accounts)
Shri T.A. Basil (FICC) (upto 06.04.2011 )
Shri Umesh Dongre (FICC) (upto 30.11.2011 )
Shri A.S. Sandhu (FICC)
Shri Gobinda Gopal Mitra, Jt. Director (FICC)
(w.e.f. 09.12.2011)
Deputy Secretary : Shri H. Abbas (upto 18.05.2011)
Shri Manish Tripathi
Smt. Lalitha Das
Shri Rajiva Kumar, FICC
Shri S. Anandan,
Shri R. Selvam, PS to Minister
Shri Tapan Dutta, DC (POP)
Sh. Anand Kumar Pal (w.e.f 17.08.2011)
Controller of Accounts : Shri Akhilesh Jha
82 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
ANNEXURE – III
LIST OF PUBLIC SECTOR UNDERTAKINGS UNDER THE ADMINISTRATIVE
CONTROL OF DEPARTMENT OF FERTILIZERS
Sl. No.
Name of the Company Headquarters Incorporation in
1. The Fertilizers and Chemicals Travancore Ltd. (FACT)
Udyogamandal September, 1943
2. Fertilizer Corporation of India Ltd. (FCI) New D elhi January, 1961
3. National Fertilizers Limited (NFL) Noida August, 1974
4. Rashtriya Chemicals & Fertilizers Ltd (RCF) Mumb ai March, 1978
5. Madras Fertilizers Limited (MFL) Chennai Decembe r, 1966
6. Projects & Development India Limited (PDIL) Noid a March, 1978
7. Hindustan Fertilizer Corporation Limited (HFC)
New Delhi March, 1978
8. Brahmaputra Valley Fertilizer Corporation
Limited (BVFCL)
Guwahati April, 2002
9. FCI Aravali Gypsum And Minerals India Limited (FAGMIL)
Jodhpur February, 2003
ANNUAL REPORT 83
84
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RS
Nitrogen
UNIT-WISE INSTALLED CAPACITY, PRODUCTION
AND CAPACITY UTILIZATION FOR THE YEARS 2010-11 & 2011-12
ANNEXURE – IV
Name of Company/
Plant
Name of Products Annual Installed Capacity
(As on 1-04-10)
Production (’000 MT) Percentage capacity utilization
2010-11 2011-12 2010-11 2011-12 ( in ‟000‟ MTs)
Public Sector: NFL:Nangal-II Urea 220.1 220.1 217.9 100.0 99.0 NFL:Bhatinda Urea 235.3 254.4 209.3 108.1 89.0 NFL:Panipat Urea 235.3 216.2 245.7 91.9 104.4 NFL:Vijaipur Urea 397.7 421.6 433.5 106.0 109.0 NFL:Vijaipur Expn. Urea 397.7 442.3 471.8 111.2 118 .6
TOTAL (NFL): 1486.1 1554.6 1578.2 104.6 106.2 BVFCL:Namrup-II Urea 110.4 39.6 50.4 35.9 45.7 BVFCL:Namrup-III Urea 144.9 91.5 89.0 63.1 61.4
TOTAL (BVFCL): 255.3 131.1 139.4 51.4 54.6 FACT:Udyogamandal A/S , 20:20 77.0 67.3 63.0 87.4 8 1.8 FACT:Cochin-II 20:20 97.0 99.2 90.4 102.3 93.2
TOTAL (FACT): 174.0 166.5 153.4 95.7 88.2 RCF:Trombay 15:15:15 45.0 66.9 55.5 148.7 123.3 RCF:Trombay-IV 20.8:20.8, 20:20 75.1 31.6 44.6 42. 1 59.4 RCF:Trombay-V Urea 151.8 156.9 142.9 103.4 94.1 RCF:Thal Urea 785.1 820.4 826.9 104.5 105.3
TOTAL (RCF): 1057.0 1075.8 1069.9 101.8 101.2 MFL:Chennai Urea / 17:17:17 366.7 219.9 273.8 60.0 74.7 SAIL:Roulkela CAN 120.0 0.0 0.0 0.0 0.0 By Product A/S 38.4 18.9 18.9 49.2 49.2 Total(Public): 3497.5 3166.8 3233.6 90.5 92.5 Cooperative Sector
IFFCO:Kandla 10:26:26 / 12:32:16 /
DAP
351.5
273.3
317.1
77.8
90.2
IFFCO:Kalol Urea 250.5 276.0 268.4 110.2 107.1 IFFCO:Phulpur-I Urea 253.5 342.8 321.5 135.2 126.8 IFFCO:Phulpur-II Urea 397.7 472.0 484.6 118.7 121.9 IFFCO:Aonla-I Urea 397.7 454.7 475.7 114.3 119.6 IFFCO:Aonla-II Urea 397.7 479.6 479.6 120.6 120.6
IFFCO:Paradeep DAP / 10:26:26 / 20:20 /
12:32:16
325.2
314.1
343.8
96.6
105.7
TOTAL(IFFCO): 2373.8 2612.5 2690.7 110.1 113.3 KRIBHCO:Hazira Urea 795.4 846.5 795.1 106.4 100.0 Total(Co -operative): 3169.2 3459.0 3485.8 109.1 110.0 Total(Pub.+Coop.): 6666.7 6625.8 6719.4 99.4 100.8
85
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Private Sector GSFC:Vadodara Urea / DAP / 20:20 / A/S 248.1 227.4 250.6 91.7 101.0 GSFC:Sikka-I DAP / 12:32:16 105.8 52.4 51.2 49.5 4 8.4 GSFC:Sikka-II DAP / 12:32:16 71.3 74.7 60.1 104.8 84.3 TOTAL(GSFC-Sikka): 177.1 127.1 111.3 71.8 62.8 GNFC:Bharuch Urea / CAN / 20:20 356.7 353.8 382.5 99.2 107.2 KSFL:Shahjahanpur Urea 397.7 474.0 446.2 119.2 112.2 Private Sector
CIL:Vizag
28:28 / 14:35:14 /
20:20 / 16:20 / 10:26:26
/ DAP
124.0
179.6
231.3
144.8
186.5
CIL:Ennore 16:20 / 20:20 41.2 42.2 46.9 102.4 113.8
CIL:Kakinada DAP / 10:26:26 / 20:20 /
14:35:14 / 12:32:16
120.6
189.7
189.9
157.3
157.5
SFC:Kota Urea 174.3 185.6 176.6 106.5 101.3 DIL:Kanpur Urea 332.1 0.0 110.4 0.0 33.2
ZIL:Goa Urea / DAP / 19:19:19 / 10:26:26 / 12:32:16
288.7
264.3
213.6
91.5
74.0
SPIC:Tuticorin Urea / DAP / 20:20 /
17:17:17
370.7
179.0
359.6
48.3
97.0
MCF:Mangalore Urea / DAP / 20:20 /
16:20
207.2
215.7
220.8
104.1
106.6
TAC:Tuticorin A/C 16.0 0.0 8.3 0.0 51.9 TCL:Haldia
DAP / 10:26:26 / 12:32:16/ 14:35:14 /
15:15:15
121.5
70.6
91.0
58.1
74.9
IGL:Jagdishpur Urea 397.7 505.3 546.0 127.1 137.3
Hin.Ind.Ltd.:Dahej DAP / 10:26:26 / 12:32:16
72.0
38.6
40.0
53.6
55.6
DFPCL:Taloja 23:23 52.9 28.4 44.9 53.7 84.9 NFCL:Kakinada-I Urea 274.8 382.5 364.0 139.2 132.5 NFCL:Kakinada-II Urea 274.8 379.0 356.3 137.9 129.7
TOTAL(NFCL): 549.6 761.5 720.3 138.6 131.1 CFCL:Gadepan-I Urea 397.7 474.8 496.7 119.4 124.9 CFCL:Gadepan-II Urea 397.7 491.3 477.6 123.5 120.1
TOTAL(CFCL): 795.4 966.1 974.3 121.5 122.5 TCL:Babrala Urea 397.7 513.7 494.3 129.2 124.3
PPL:Paradeep
DAP / 14:35:14 / 20:20 /
12:32:16 / 10:26:26 /
28:28
129.6
204.5
192.8
157.8
148.8
By Product A/S 7.5 3.7 5.3 49.3 70.7 Total (Private Sector): 5378.3 5530.8 5856.9 102.8 108.9 Total(Pub+Coop+Pvt): 12045.0 12156.6 12576.3 100.9 104.4
86
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TIL
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RS
Phosphate
Name of Company/Plant
Name of Products Annual
Installed
Production (‘000’ MT)
Percentage capacity utilisation
Capacity 2010-11 2011-12 2010-11 2011-12
(1-04-09)
Public Sector:
FACT:Udyogamandal 20:20 29.7 29.6 30.2 99.7 101.7
FACT:Cochin-II 20:20 97.0 99.2 90.4 102.3 93.2
Total(FACT): 126.7 128.8 120.6 101.7 95.2
RCF:Trombay 15:15:15 45.0 66.9 55.5 148.7 123.3
RCF:Trombay-IV 20.8:20.8/ 20:20 75.1 31.6 44.6 42.1 59.4
Total(RCF): 120.1 98.5 100.1 82.0 83.3
MFL:Chennai 20:20 / 19:19:19 / 17:17:17
142.8
0.0
28.3
0.0
19.8
SSP Units SSP 12.8 0.0 0.0 0.0 0.0
Total(Public): 402.4 227.3 249.0 56.5 61.9
Cooperative Sector
IFFCO:Kandla DAP / 10:26:26 / 12:32:16
910.0
717.0
764.6
78.8
84.0
IFFCO:Paradeep DAP / 10:26:26 / 20:20 /
12:32:16
802.8
570.7
601.1
71.1
74.9
Total( Co -op.) 1712.8 1287.7 1365.7 75.2 79.7
Total(Pub.+Coop.): 2115.2 1515.0 1614.7 71.6 76.3
Private Sector
GSFC:Vadodara DAP / 20:20 75.9 56.1 59.8 73.9 78.8
GSFC:Sikka-I DAP , 12:32:16 270.5 134.0 131.0 49.5 48.4
GSFC:Sikka-II DAP 182.2 190.8 153.5 104.7 84.2
TOTAL(GSFC-Sikka): 452.7 324.8 284.5 71.7 62.8
GNFC:Bharuch 20:20 28.5 33.2 39.9 116.5 100.3
CFL:Vizag 14:35:14 / 28:28 / 166.0 217.3 270.3 130.9 162.8
87
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L R
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10:26:26 / 20:20 / DAP
CFL:Ennore 16:20 / 20:20 48.0 52.2 58.6 108.8 122.1
CIL:Kakinada DAP / 12:32:16 / 20:20 / 14:34:14 / 10:26:26
308.2
483.0
434.9
156.7
141.1
ZIL:Goa DAP / 19:19:19 / 10:26:26 / 12:32:16
197.4
212.8
205.5
107.8
104.1
SPIC:Tuticorin DAP / 17:17:17 / 20:20 218.5 49.1 1 48.5 22.5 68.0
MCF:Mangalore DAP / 20:20 / 16:20 82.8 90.9 89.3 109.8 107.9
TCL:Haldia DAP / 10:26:26 / 12:32:16/ 14:35:14
336.9
200.6
238.8
59.5
70.9
Hin.ind.Ltd.:Dahej DAP / 10:26:26 / 12:32:16
184.0
98.5
102.3
53.5
55.6
DFPCL:Taloja 23:23 52.9 28.4 44.9 53.7 84.9
PPL:Paradeep
DAP / 14:35:14 / 20:20 / 12:32:16 / 10:26:26 / 28:28
331.2
428.9
407.6
129.5
123.1
SSP Units SSP 1030.6 432.0 432.0 41.9 41.9
Total (Private Sector): 3513.6 2707.8 2816.9 77.1 80.2
Total(Pub+Coop+Pvt): 5628.8 4222.8 4431.6 75.0 78.7
* Actual figures have been considered from April 2011- November 2011 and estimated for December 2011 to March 2012
* Estimated Production figures have been reported for the year 2011 -12.
YEAR
CONSUMPTION
PRODUCTION
IMPORTS
N
P
K
TOTAL
N
P
K TOTAL
N
P
K
TOTAL
1981-82
40.69
13.22
6.73
60.64
31.44
9.49
0.00
40.93
10.54
3.43
6.44
20.41
1982-83
42.24
14.37
7.27
63.88
34.24
9.80
0.00
44.04
4.25
0.63
6.44
11.32
1983-84
52.86
17.07
7.99
77.92
34.85
10.48
0.00
45.33
6.56
1.43
5.56
13.55
1984-85
54.87
18.86
8.38
82.11
39.17
12.64
0.00
51.81
20.08
7.45
8.71
36.24
1985-86
56.61
20.05
8.08
84.74
43.28
14.28
0.00
57.56
16.80
8.16
9.03
33.99
1986-87
57.16
20.79
8.50
86.45
54.10
16.60
0.00
70.70
11.03
2.55
9.52
23.10
1987-88
57.17
21.87
8.80
87.84
54.66
16.65
0.00
71.31
1.75
0.00
8.09
9.84
1988-89
72.51
27.21
10.68
110.40
67.12
22.52
0.00
89.64
2.19
4.07
9.82
16.08
1989-90
73.86
30.14
11.68
115.68
67.47
17.96
0.00
85.43
5.23
13.11
12.80
31.14
1990-91
79.97
32.21
13.28
125.46
69.93
20.52
0.00
90.45
4.14
10.16
13.28
27.58
1991-92
80.46
33.21
13.61
127.28
73.01
25.62
0.00
98.63
5.66
9.67
12.36
27.69
1992-93
84.27
28.44
8.84
121.55
74.30
23.06
0.00
97.36
11.37
6.89
10.82
29.08
1993-94
87.89
26.69
9.08
123.66
72.31
18.16
0.00
90.47
15.88
7.22
8.57
31.67
1994-95
95.07
29.31
11.25
135.63
79.45
24.93
0.00
104.38
14.76
3.80
11.09
29.65
1995-96
98.23
28.98
11.56
138.77
87.77
25.58
0.00
113.35
19.93
6.47
13.15
39.55
1996-97
103.01
29.77
10.30
143.08
85.99
25.56
0.00
111.55
11.67
2.46
6.13
20.26
1997-98
109.01
39.14
13.73
161.88
100.86
29.76
0.00
130.62
13.62
6.72
11.40
31.74
1998-99
113.54
41.12
13.32
167.98
104.80
31.41
0.00
136.21
6.35
9.68
15.42
31.45
1999-00
115.92
47.99
16.78
180.69
108.90
33.99
0.00
142.89
8.33
15.03
17.39
40.75
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YEAR-WISE, NUTRIENTS-WISE CONSUMPTION,
PRODUCTION AND IMPORTS OF FERTILIZERS
ANNEXURE-V
(lakh M.T.)
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2000-01
109.20
42.15
15.67
167.02
109.61
37.43
0.00
147.04
1.54
3.96
15.41
20.91
2001-02
113.10
43.82
16.67
173.59
107.68
38.60
0.00
146.28
2.69
4.29
17.01
23.99
2002-03
104.74
40.19
16.01
160.94
105.64
39.10
0.00
144.74
0.66
1.70
14.38
16.74
2003-04
110.76
41.24
15.98
167.98
106.34
36.32
0.00
142.66
1.32
3.38
15.48
20.18
2004-05
117.14
46.24
20.61
183.99
113.38
40.67
0.00
154.05
4.09
2.96
20.45
27.50
2005-06
127.23
52.04
24.13
203.40
113.54
42.21
0.00
155.75
13.85
11.21
27.47
52.53
2006-07
137.74
55.43
23.34
216.51
115.78
45.17
0.00
160.95
26.88
13.23
20.69
60.80
2007-08
144.19
55.15
26.36
225.70
109.00
38.07
0.00
147.07
36.77
12.53
26.53
75.83
2008-09
150.90
65.06
33.13
249.09
108.7
34.64
0.00
143.34
38.44
29.27
33.80
101.51
2009-10
155.80
72.74
36.32
264.86
119.0
43.21
0.00
162.21
34.47
27.56
29.44
91.47 2010-11 165.58 80.50 35.14 281.22 121.56 42.22 0.00 163.78 44.92 38.02 40.69 123.63 2011-12 N.A. N.A. N.A. N.A. 81.23 27.79 0.00 109.02 38.83 34.71 22.48 96.02 * Actual figures have been considered from April 2011- Nov 2011
** Provisional Import figures are reported upto 30.11.2011
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ANNEXURE-VI
SECTOR-WISE PRODUCTION OF NITROGENOUS
AND PHOSPHATIC FERTILIZERS (’000’ MT)
Nutrient 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 *
Target Actual Target Actual Target Actual Target Actual Target Actual Target Actual Target Actual Target Actual Target Estt.
Nitrogen(N)
Public Sector 3106.2 3007.9 3091.5 3051.0 3141.8 2958.6 3117.0 3046.7 3119.7 2887.0 3053.5 2925.2 3054.8 3118.1 3079.8 3166.7 3200.9 3233.5
Co-operative
Sector
2672.7
2797.3
2812.3
2901.7
2832.5
2958.3
3106.4
3004.3
3303.4
3031.0
3260.7
3133.0
3280.8
3404.3
3363.5
3459.1
3359.8 3485.8
Private Sector 5401.9 5130.5 5502.0 5382.5 5837.0 5437.6 5224.9 5526.9 5485.0 4982.0 5583.6 4811.5 5749.0 5378.0 6010.0 5530.8 6197.7 5857.0
Total(Nitrogen): 11180.8 10935.7 11405.8 11335.2 11811.3 11354.5 11448.3 11577.9 11908.1 10900.0 11897.8 10869.7 12084.6 11900.4 12453.3 12156.6 12758.4 12576.3
Phosphate(P)
Public Sector 399.8 353.3 402.7 266.3 383.0 294.9 387.3 232.7 234.0 161.4 241.8 191.7 207.3 227.7 236.5 227.2 292.4 248.9
Co-operative
Sector
776.0
778.7
875.1
938.3
880.0
1035.8
1461.5
1129.7
1496.2
969.2
1104.8
916.2
937.0
1194.1
1242.2
1287.7
1311.8 1365.7
Private Sector 3464.8 2668.4 3648.1 2862.7 3400.0 2890.6 2972.0 3154.8 3184.2 2676.7 3087.7 2356.4 2986.8 2899.1 3366.2 2707.8 3321.9 2817.0
Total(Phosphate): 4640.6 3800.4 4925.9 4067.3 4663.0 4221.3 4820.8 4517.2 4914.4 3807.3 4434.3 3464.3 4131.1 4320.9 4844.9 4222.7 4926.1 4431.6
Grand Total: 15821.4 14736.1 16331.7 15402.5 16474.3 15575.8 16269.1 16095.1 16822.5 14707.3 16332.1 14334.0 16215.7 16221.3 17298.2 16379.3 17684.5 17007.9
* Estimated Production figures have been reported for the year 2011 -12.
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SECTOR-WISE CAPACITY UTILIZATION ANNEXURE-VII
OF NITROGENOUS AND PHOSPHATIC FERTILIZERS (%age)
Nutrient
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
Nitrogen(N)
Public Sector:
86.7
87.2
84.6
87.1
82.5
83.6
89.2
90.5
92.5
Co-operative Sector:
99.5
102.0
93.3
94.8
95.6
98.9
107.4
109.1
110.0
Private Sector:
89.7
94.1
100.8
102.5
92.4
89.5
100.0
105.1
108.9
Total(Nitrogen):
91.1
94.0
94.1
96.0
90.4
90.2
98.8
100.9
104.4
Phosphate(P)
Public Sector:
81.7
61.6
68.2
53.8
37.3
44.3
56.6
56.5
61.9
Co-operative Sector:
94.4
103.1
60.5
60.5
60.5
53.5
69.7
75.2
79.7
Private Sector:
64.1
66.3
82.3
89.8
76.2
67.1
82.5
77.1
80.2
Total(Phosphate):
70.1
71.9
74.6
79.8
67.3
61.2
76. 8
75.0
78.7
* Estimated ( Actual Production have been considered from April, 2008-October, 2008)
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ANNEXURE-VIII
Department of Fertilizers
ANNUAL PLAN 2011-12
(Rs. crore)
Sl.
No. Name of the
Scheme Annual Plan 2009-10 (Actual) Annual Plan 2010-11 (BE) Annual Plan 2010-11 (RE) Annual Plan 2011 -12 (BE)
GBS IEBR Total GBS IEBR Total GBS IEBR Total GBS IEBR Total Outlay
Earmarked for
NER
Centrally
Sponsored
Scheme (CSS)
Total CSS Central Sector
Scheme (CS)
1 RCF 141.02 141.02 622.82 622.82 237.37 237.37 293.30 293.30 2 FAGMIL 0.37 0.37 11.29 11.29 5.89 5.89 4.15 4.15 3 PDIL 7 .52 7.52 5.38 5.38 9.45 9.45 9.73 9.73 4 NFL 43.05 43.05 900.50 900.50 655.71 655.71 2363.08 2363.08 5 KRIBHCO 319.61 319.61 1160.00 1160.00 1138.63 1138.63 654.96 654.96 6 Revival of Sick
CPSEs
6(i) BVFCL 65.00* 65.00* 45.00* 45.00* 45.00* 45.00* 67.80* 67.80* 6(ii) FACT 34.00 34.00 89.99 89.99 89.99 89.99 60.74 60.74 6(iii) MFL 96.99 96.99 74.50 74.50 74.50 74.50 88.95 88.95 6(iv) FCI 0 0 0 6(v) HFC 0 0 0 6(vi) PPCL 7 Misc. Schemes
(MIS/IT and R&D) 3.68 3.68 5.50 5.50 5.50 5.50 7.50 7.50
8 Capital Subsidy
for conversion
9 Investments for
JVs abroad# 0.01 0.01 0.01 0.01 0.01 0.01
10 Revival of Closed
Units 0
TOTAL CS: 199.67 511.57 711.24 215.00 2699.99 2914.99 215.00 2047.05 2262.05 225.00 3325.22 3550.22 *The amount earmarked for BVFCL will be utilized for the benefits of North Eastern Region #DoF is exploring possibilities of JVs abroad. Since no firm proposal is at hand right now, only a token amount of Rs.01.00 lakh has been provided.
ANNEXURE-IX
DETAILS OF HEAD -WISE ALLOCATION OF FUNDS UNDER NON -PLAN AND PLAN FOR BE 2011-12 and RE 2011-12
(Rs In Crore) I NON-PLAN PROVISIONS: BE 2011-12 RE 2011-12
A REVENUE SECTION
1. Sectt. Proper (MH 3451) 20.00 20.00
2. Office of FICC & other Programmes (FICC+MIT) (MH 2852)
2.07
2.07
3. Subsidy on Nitrogenous Fertilizers (MH 2852)
(a)Indigenous Urea including Frieght Subidy (Gross) 13308.00 19108.00
(b)Compensation on account of loss due to sale of fertilizers bonds 0.00 200.00
4. Subsidy on Imported Fertilizers (MH 2401)
Gross 10575.00 17475.00
Recovery(-) 3592.00 3592.00
Net 6983.00 13883.00
5. Payment to Manufacturers/ Agencies for concessional sale of Decontrolled Fertilizers (MH 2401)
(i) (a) Indigenous Decontrolled Fertilizers (Gross) 14343.00 19543.00
(b)Compensation on account of loss due to sale of fertilizers bonds 0.00 289.00
(ii) (a) Imported Decontrolled Fertilizers (Gross) 15363.87 14664.94
(b) Compensation on account of loss due to sale of fertilizers bonds 0.00 289.93
Total (Decontrolled Fertilizers) -(Gross) 29706.87 34786.87
6. Write off of loans, interest and penal interest on GOI loan outstanding against HFCL, FCI, MFL, PDIL and FACT (MH 3475)
0.01
0.01
7. Post closure adjustment liabilities of PPL (MH 3475) 0.01 0.01
TOTAL : (REVENUE SECTION) - Gross 53611.96 71591.96
Net 50019.96 67999.96
B. CAPITAL SECTION
Non-Plan loans to PSUs (MH 6855)
HFC 0.01 0.01
FCI 0.01 0.01
PPCL 0.01 0.01
BVFCL 0.01 0.01
FACT --- --- TOTAL (CAPITAL SECTION) 0.04 0.04
TOTAL : (NON -PLAN) - Gross 53612.00 71592.00
Net 50020.00 68000.00
II PLAN PROVISIONS:
A. REVENUE SECTION
ANNUAL REPORT 93
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1. Grant to PDIL for R &D --- ---
2. S&T Programme of Department (MH 2852) 2.00 2.00
3. Grant in the field of Management Information Technology (MH 2852)
5.50
5.50
4. Capital subsidy for conversion of 4 existing FO/LSHS Plants to NG/LNG (MH 2852)
0.00
0.00
TOTAL (REVENUE SECTION) 7.50 7.50 B. CAPITAL SECTION :
Investment in and loans to PSUs (MH 6855) 1. FACT 60.74 60.74
2. BVFCL 67.80 67.80
3. HFC ---- ----
4. PDIL ---- ----
5. MFL 88.95 88.95
6. FCI ---- ----
7. PPCL ---- ----
Investments for JVs abroad (MH 4855) 0.01 0.01
TOTAL (CAPITAL SECTION) 217.50 217.50
TOTAL PLAN 225.00 225.00
TOTAL -DEPARTMENT OF FERTILIZERS (Gross) 53837.00 71817.00
TOTAL -DEPARTMENT OF FERTILIZERS (Net) 50245.00 68225.00
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DETAILS OF EXPENDITURE ON SUBSIDY/ CONCESSION DURING ANNEXURE-X THE YEAR 2001-02 to 2010-11 AND BUDGET ESTIMATES 20 12-13
Period
Amount of Concession disbursed on Decontrolled
Fertilizers (Indigeneous + Imported)
Amount of subsidy
disbursed on urea
Total for all
fertilizers Indigenous
P&K Imported
P&K
Total Indigenous
Urea Imported
Urea Total of
Urea(Gross) (Rs In Crores)
(Gross)
2001-02 3759.52 744.00 4503.52 8044.00 147.50 8191.50 12695.02 2002-03 2487.94 736.58 3224.52 7790.00 1.16 7791.16 11015.68 2003-04 2606.00 720.00 3326.00 8521.00 0.82 8521.82 11847.82 2004-05 3977.00 1165.18 5142.18 10243.15 742.37 10985.52 16127.70 2005-06 4499.20 2096.99 6596.19 10652.57 2140.88 12793.45 19389.64 2006-07 6648.17 3649.95 10298.12 12650.37 5071.06 17721.43 28019.55 2007-08
(Cash)
7833.80
}10333.80
5100.00
}6600.00
12933.80
}16933.80
12950.37
}16450.37
9934.99
}9934.99
22885.36
}26385.36
35819.16
}43319.16 (Bonds) 2500.00 1500.00 4000.00 3500.00 ---- 3500.00 7500.00
2008-09
(Cash)
24707.10
}32957.10
23847.69
}32597.69
48554.79
}65554.79
17968.74
}20968.74
12971.18
}12971.18
30939.92
}33939.92
79494.71
}99494.71 (Bonds) 8250.00 8750.00 17000.00 3000.00 ---- 3000.00 20000.00
2009-10 16000.00 23452.06 39452.06 17580.25 6999.98 24580.23 64032.29 2010-11
20650.00
20850.00
41500.00
15080.73
9255.95
24336.68
65836.68
BE 2011-12
14343.00
15363.87
29706.87
13308.00
10575.00
23883.00
53589.87
RE 2011-12
19832.00
14954.87
34786.87
19308.00
17475.00
36783.00
71569.87*
Actual Booked
Expenditure as on 28-02-2012 * *
19539.84
12662.82
32202.66
16796.96
17061.20
33858.16
66060.82
BE 2012-13
16000.01
12576.11
28576.12
19000.01
18016.00
37016.01
65592.13
* Including Rs.13778.93 Crore allocated under 2nd Supplementary Demands for Grants for 2011 -12 under which Rs.778.93 Crore have been allocated towards compensation on account of loss due to sale of Fertilizers Bonds. Additional allocation of Rs.4201.07 Crore have also been made in RE 2011-12 which will be available for expenditu re only in 3rd Supplementary. Besides, Ministry of Finance has p roposed to allocate Rs.3,000 Crore under 3rd Supplementary. ** As per PAO’sProgressive Expenditure Statement
ANNEXURE XI
List of the grades of Rock Phosphate notified by Department of Fertilizers for manufacturing/selling SSP under
Concession Scheme/ Nutrient Based Subsidy Policy of decontrolled P & K fertilizers
Notification No.M-19011/33/2001-MPR dated 19th
September, 2001 S.No. Primary Grade of
rock phosphate Specification of blending rock Source of origin
A Mined rock chips with 31.5% and
above P2O5
content by wt. On
an average
- Rajasthan State Mines & Minerals Limited
(RSMML)
B Jordan Rock with 30.0% and above
P2O5 content by
wt. On an average
- Rock imported from Jordan.
C Beneficiated rock
phosphate (BRP
with 33.55% and
above P2O5
content by wt. On
an average.
- RSMML
D Syrian rock with 29.36% and above
P2O5 content by
wt. On an average.
- Rock imported from Syria
E Beneficiated rock phosphate (BRP
with 33.55% and
above P2O5
content by wt. On
an average.
Jhabua A or B grade rock with 23% P2O5 content by wt. To get a mixture having 31.6% and above P2O5 conten t
by wt. On an average.
BRP from RSMML and blending rock from
Madhya Pradesh State
Mining Corpn. Ltd.
(MPSMC)
F Jordan rock with 31.6% and above
P2O5 content by
wt. On an average.
Jhabua rock with 25% P2O5 content by wt to get a mixture having 30% and above P2O5 content by wt. On
an average.
Rock imported from Jordan and blending
rock from MPSMC.
Notification No.M-19011/33/2001-MPR dated 8th
October, 2001 G Egyptian rock
with 32% and
above P2O5
content by wt. On
an average.
- Rock imported from Egypt.
H Beneficiated rock
phosphate (BRP)
with 33.55% and
above P2O5
content by wt. On
an average.
Lower grade rocks with 25% P2O5 content by wt. From
mines of Madhya Pradesh State Mining Coproration
Ltd., RSMML, Rajasthan State Mineral Development
Corpn. (RSMDC) or 27-31% P2O5 content by wt. Of
Matton mines to get a mixture having 31.4% and above
P2O5 content by wt. On an average.
BRP from RSMML.
Blending rock from
MPSMC, RSMDC,
RSMML and Hindustan
Zinc. Ltd. (HZL).
Notification No. M -19011/33/2001-MPR dated 31st
January, 2002 I Beneficiated rock
phosphate (BRP)
with 33.55% and
above P2O5 content
by wt. On an
average.
(i) Lower grade rocks with +22% but less than 25% P2O5 content by wt. Of RSMDC to get a mixture
having 31.7% and above P2O5 content by wt. On an
average.
(ii) Rocks with 25% and above to 27% P2O5 content by
wt. From mines of RSMDC to get a mixture having
31.4% and above P2O5 content by wt on an average.
(iii) Rocks with +30% P2O5 content by wt. From mines
of RSMDC to get a mixture having 31.5% P2O5 content
by wt. On an average.
(iv) Rock with 23% P2O5 content by wt. From mines of
RSMML to get a mixture having 31.4% P2O5 content
by wt. On an average.
BRP from RSMML. Blending rock from
RSMDC and RSMML.
J Jordan rock with 32% and above
P2O5 content by wt.
On an average.
Lower grade rock with 25% P2O5 content by wt. From mines of RSMML to get a mixture having 30.66% P2O5
content by wt. On an average.
Rock imported from Jordan and blending
rock from RSMML.
Notification No. 19011/33/2001-MPR dated 13th
May, 2002 K Israeli Rock
phosphate with
32% P2O5 content
and above by wt.
On an average.
Not applicable Rock phosphate
imported from Israel.
96 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
Notification No. M-19011/33/2001-MPR (Vol.II) dated 23 rd April 2003
L
Beneficiated rock phosphate with
33.5% P2O5 content by wt on an average.
Lower grade rock with P2O5 content 29% by wt and above with 2.78% average iron oxide content of MPSMC to get a mixture of 31.4% on an average.
BRP from RSMML. Blending rock from Hirapur Mines of MPSMC.
M
Notification NO.19011/33/2001-MPR dated 14.12.2005 – Beneficiated Rock Phosphate with 30.2% P2O5 produced by M/s. Krishana Phoschem Ltd., 115-118, AKVN
Industrial Area, P.O. Meghnagar, Jhabua, Madhya Pr adesh
19011/33/2001-MPR dated 19.9.2006 (Notified on 19.9.2006)
N
Beneficiated rock phosphate (BRP with 33.55% and above P2O5 content by wt. On an average.
- RSMML-
O 19011/33/2001-MPR (Vol -II) dt. 8.5.2007 Primary grade of Rock Phosphate of Vietnam with 34% P205 content by weight on an average.
P 19011/33/2001-MPR (Vol -II) dt. 30.10.2007 Primary grade of Rock Phosphate of Algeria with 31. 2% P205 content by weight on an average.
Q 19011/33/2001-MPR (Vol -II) dt. 19.11.2007 Primary grade of Rock Phosphate of Egypt with 31.02 % P205 content by weight on an average.
R
Notification No. 19011/33/2001-MPR (Vol.II) dt. 15.6.2009 Beneficiated Rock Phosphate with 31% P2O5 produced by M/s. BEC fertilizers Ltd., Bilaspur Chhattisgarh
S
F.No. 19011/33/2001 -MPR dated 3.1.2011
(i) Blend of primary Rock Phosphate of Nauru of 37.70% P2O5 with secondary Rock Phosphate of Egypt of 28.02% P2O5, in the ratio of 30% minimum P( rimary Rock Phosphate) and 70% maximum (Secondary Rock Phosphate).
(ii) Blend of primary Rock Phosphate of Togo of 36. 16% P2O5 with secondary Rock Phosphate of
Vietnam with 26.8-27.13% P2O5 in the ratio of 50% minimum (Primary Rock Phosphate) and 50% maximum (Secondary Rock Phosphate).
(iii) Rock Phosphate of Israel with 31% P2O5.
(iv) Blend of primary Rock Phosphate of RSMML of 31.5% P2O5 with secondary Rock Phosphate of
Egypt with 30% P2O5 in the ratio of 60% minimum (Primary Rock Phosphate) and 40% maximum (Secondary Rock Phosphate).
(v) Blend of primary Rock Phosphate of Nauru containing 38.5-39% P2O5 with secondary Rock
Phosphate of Vietnam with 26-28% P2O5 in the ratio of 30% minimum (Primary Rock Phosphate) and 70% maximum (Secondary Rock Phosphate).
T Beneficiated Rock Phosphate having 31% P2O5 contentproduced by M/s Shiva Fertilizers Ltd. Nanded, Maharashtra (now known as Shiva Global Agro Industr ies Ltd.)
U
F.No. 19011/33/2001 -MPR dated 29.4.2011
Primary grade of Rock Phosphate of Maton Mines of Hindustan Zinc Ltd., Udaipur with 31.5% P2O5 content by weight on an average.
….
ANNUAL REPORT 97
92
ANNEXURE-XII
PROFITABILITY OF THE PUBLIC SECTOR UNDERTAKINGS UND ER THE
ADMINISTRATIVE CONTROL OF DEPARTMENT OF FERTILIZERS
Net Profit (+)/ Net Loss (-)
(in Rs crores)
Name of Undertaking 2007-08 2008-09 2009-10 2010-11 2011-12 (upto Dec’11)
Fertilizer Corporation of India limited (FCI)
(-) 1504.83 (-) 752.60 (-) 585.86 (-)508.09 (-)443.74
Hindustan Fertilizer Corporation Ltd (HFCL)
(-)1101.98 **4841.16 (-)382.47 (-)382.28 ***(-)300.19
Rashtriya Chemicals and Fertilizers Limited (RCF)
158.15 211.58 234.87 245.12 135.73
National Fertilizers Limited (NFL) 109.00 97.00 171.51 139.00 69.88
Project and Development India Limited (PDIL)
12.26* 14.82 14.48 21.02 15.70
The Fertilizers and Chemicals Travancore Limited (FACT)
8.97 42.95 (-)103.83 (-)49.33 (-)14.42
Madras Fertilizers Limited (MFL) (-)134.85 (-)145.38 6.88 169.86 111.43
Brahmaputra Valley Fertilizer Corporation Limited (BVFCL)
(-)105.83 (-)215.04 (-) 27.86 (-)85.09 (-)78.28
FCI- Aravali Gypsum and Minerals India Limited (FAGMIL)
7.54 9.04 8.67 24.05 8.21
*Pre-Tax Profit
**Book Profit is due to write back of interest on Government of India loan
***Unaudited
98 DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
ANNEXURE-XIII
EMPLOYMENT OF SC/ST, EX- SERVICEMENT, PHYSICALLY HANDICAPPED & OTHER BACKWARD CLASSES (OBCs) PERSONS IN PUBLIC SEC TOR
UNDERTAKING/CO-OPERATIVE
SL. NO.
NAME OF PSU
GROUP TOTAL NO. OF EMPLOYEE S
NO.OFEMPLOYEES BELONGING TO
SC ST EX.SE R
WO MEN
GEN P.Hs OBC
1. NFL A B C D
1623 1938
827 137
356 508 210 108
81 157 41
3
81 113 110
7
- - - -
- - - -
4 31 32
1
9 23 15
3
TOTAL 4525 1182 282 282 NIL NIL 68 50 2. MFL A
B C D
297 178 266
-
39 35 98
3 3 1
- -
12
- - -
- - -
1 1 3 -
26 9
68
TOTAL 741 172 7 12 NIL NIL 5 103 3. FAGMIL TOTAL 86 14 4 NIL NIL NIL NIL 7 4. PDIL A
B C D ON CONTR ACT
413 33 32
NIL 67
48 4 9
NIL 9
20 0 0
NIL 3
62 2 7
NIL 13
TOTAL 545 70 23 84 5. RCF A
B C D
1472 1276 1275
121
224 164 171
17
47 78
121 11
1 3 1 2
8 6
17 4
111 8
175 47
TOTAL 4144 576 257 7 35 341 6. FACT A
B C D D-S
471 1441
653 612
21
76 183
78 86
7
10 54 18 17
0
0 12 20
4 0
47 121
40 6
14
317 807 289 251
4
4 27
9 31
1
68 396 268 258
10
TOTAL 3198 430 99 36 228 1668 72 1000 7. BVFCL A
B C D
306 287 472
22
28 26 28
4
26 49 86
3
2 1 - -
- - - -
- - - -
- - 3 -
80 92
164 3
TOTAL 1087 86 164 3 - - 3 339
ANNUAL REPORT 99
SUMMARY OF AUDIT OBSEVATIONS PERTAINING TO DEPARTMENT OF FERTILIZERS Audit Report No. CA 3 of 2011-12
National Fertilizers Limited
ANNEXURE-XIV
Para 8.1 Marketing of products
Though the Company ranks as the second
largest producer of urea in the country with a
market share of 16.8 per cent of total urea
p r o d u c t i o n , t h e r e i s s t i l l s c o p e f o r
i m p r o v e m e n t . E ff i c i e n c y a n d c o s t
effectiveness was not visible where
marketing and sale of its products was
concerned as marketing expenses on sale of
urea led to under recovery of Rs. 15.04 crore
during 2007-08 to 2009-10, while untimely
import of Muriate of Potash led to a loss of Rs.
86 lakh with stocks remaining unsold till
February 2010. Also sale of industrial
products below their cost of production led to
a loss of Rs. 7.06 crore during the period
under review. Further, where marketing
operations like handling, transportation,
warehousing etc. were concerned the
Company continued to incur secondary
freight expenditure in violation of the New
Policy of “ Uniform Freight Subsidy” which
resulted in non-recovery of Rs 8.34 crore.
Also, allowing credit in excess of limits and
without obtaining security resulted in blocking
of funds. Non-renewal of handling and
transportation contract on aregular basis
resulted in delay in awa4d of contact and
award of contracts on a single tender basis.
Rashtriya Chemicals and Fertilizers
Limited
Para 8.2 Project implementation
Audit examined the projects implemented by
Rashtriya Chemical and Fertilizers Limited
during 2007-08 to 2009-10. Delays were
observed at different stages of the project
starting from tendering to award of contract in
each of the contract and resulting in cost over
run despite a creation of a dedicated cell to
monitor the progress of the projects. The
delay had resulted in cost over run of Rs.
68.35 crore (March 2010). Moreover the
slippages in the project schedule also
affected the marketability of the project due to
change in the market conditions. Besides
there were deficiencies in the selection of the
vendor, non-evaluation of capability of
vendor, non-conducting of market study, non-
identification of viable associate, non-
compliance with Board directive on tendering
and unproven technology. Thus the project
deliverables envisaged during conceptual
stage could not be realised due to inadequate
monitoring.
Summary of important audit observations
printed in the report of the CAG of India
Union Government (Civil)-No. 8 of 2011-
12-Peformance Audit of Fertilizer Subsidy
1. Assessment of Fertilizer Requirements
We found that the process of detailed
assessment of fertilizer requirements was
flawed. No minutes of the deliberations of the
s e a s o n a l A g r i c u l t u r e Z o n a l I n p u t s
Conferences were maintained by the
Department of Agriculture and Co-operation,
in the absence of which the justification for the
State-wise and month-wise requirement of
major fertilizers could not be ascertained.
This was further confirmed by the State-
specific audit findings, which revealed that
requirements of fertilizers were generally
projected by an increase of 5 to 10 per cent
over the previous season's / year's
requirements, and indicated that no scientific
method was followed for assessing the
requirement of fertilizers. In most States, the
requirement of various types of fertilizers
were projected at the level of the State
Directorate of Agriculture only (without input
from the District and lower levels) and not
100
DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
95
based on the availability of irrigation facilities
soil health and other local factors. Further, in
most States, testing of soil health, which
would facilitate determination of the correct
dosage of fertilizer nutrients, covered only a
fraction of the agricultural land holdings.
2. F e r t i l i z e r p r o j e c t i o n , i m p o r t a n d
Consumption
We found that the assessed requirement of
fertilizers went up by more than 70 per cent
during the 11 year period from 1998-99 to
2008-09, total production went up by just 11
per cent, while imports went up by nearly 236
per cent. Despite the huge amount of
subsidy (increasing from Rs. 11,387 crore in
1998-99 to Rs. 96,603 crore in 2008-09), the
production of fertilizers increased only
marginally from 269 lakh MT to 298 MT.
Changes in the subsidy regime, including
States I to III of the New Pricing Scheme
(NPS), have failed incentivize increase in
domestic production of fertilizer. Increased
consumption of fertilizer is, thus, largely met
through increased fertilizer import. This
leaves the country dependent on imports,
whose pricing is volatile. The subsidy/
concession on imported fertilizers over 1998-
99 to 2008-09 increased from 3 per cent to 47
per cent of the total subsidy.
The production of urea during the 11 yea
period from 1998-99 to 2008-09 registered a
negligible increase of just 3 per cent.
Although the change in urea subsidy policy
from individual unit-based pricing under the
Retention Price Scheme (RPS) to group
based pricing under the new Pricing Scheme
(NPS) resulted in a substantial shift from
naphtha-based urea production to gas-based
urea production. It did not result in a
significant increase in either capacity or
production of urea. Increased consumption
of urea was met primarily through imports.
Further, the weighted average cost of
production of urea increases substantially by
81 per cent to 120 per cent, post the NPS.
Even the conversion of naphtha units to gas-
based units did not result in a reduction in the
cost of production. Also, despite the group
approach of NPS, the pre-set norms for
energy consumption (which represents the
single larges component of the cost of
production of urea) varied from unit to unit
within the same group.
As regards phosphatic fertilizers, although
the capacity nearly doubled from 1998-99 to
2008-09, actual production of DAP and NPK
complexes increased by only 30 per cent. In
fact, the production of DAP came down
substantially. However, the indigenous
production of phosphatic fertilizers is largely
b a s e d o n i m p o r t e d r a w m a t e r i a l s /
intermediates. The increase in consumption
of DAP/ MAP/ NPK complexes was met
primarily through imports fat very high prices,
which led to multi-fold increase in the subsidy
burden.
As regards Potassic fertilizers, the country's
requirement is met fully through imports. We
found that, instead of curbing further imports
and drawing down on available stock as of
March 2008, the Ministry imported an
additional 57 lakh MT of MOP (43 lakh MT as
per expenditure figures), with an avoidable
addition to the subsidy burden of about Rs.
10,000 crore.
On the consumption front, while there was a
consistent gap between consumption of
assessed requirements, the consumption
figures broadly tracked the total availability of
fertilizers (production + import), indicating
that whatever fertilizer was available was
readily consumed. While this is most likely on
account of the highly subsidised price, this
also confirms the lack of assessment of
requirement on a scientific basis.
While fertilizer consumption increased by 46
per cent from 2003-08 to 2008-09, the major
ANNUAL REPORT 101
components of agricultural production
(foodgrains, oilseeds and sugarcane)
increased by just 16 per cent over the same
period, indicating a relatively weak
correlation. Also, the pattern of fertilizer
consumption across different States was
highly skewed, with States like Andhra
Pradesh, Punjab, Haryana and Bihar having
high consumption rates while Madhya
Pradesh, Orissa, Assam and Jharkhand had
very low consumption rates. There was a
fairly high degree of correlation between the
consumption rates and the proportion of
irrigated area; the higher the proportion of
irrigated area, the higher the rate of
consumption of fertilizers. For example,
Punjab with 98 per cent irrigated area
consumed 221 Kg/ha in 2008-09, while
Jharkhand with 10 per cent irrigated area
consumed only 56 kg/ha. It may be noted
that data on fertilizer consumption is based
only on first point sales at the district levels
and does not taken note of actual
consumption (let alone purchases) by
individual farmers for agricultural purpose; to
that extent, the fertilizer consumption data is
unreliable. Also, despite huge amounts of
subsidy/ concession, we found numerous
instances of non-availability/shortage of
f e r t i l i z e r s a s w e l l a s i n s t a n c e s o f
overstocking/excess availability of fertilizers,
confirming a mismatch between supply and
requirement at the grassroot level. We also
found several instances of diversion of
fertilizers for non-agricultural purposes, as
well as smuggling of fertilizers in border
districts in the Eastern/North-eastern States.
3. Payment of Subsidy Claims
Fertilizer units/importers are eligible for
subsidy payments when fertilizers are
despatched to the first stocking points in the
district, and details of despat6ch are
uploaded onto the web-based Fertilizer
Management System (FMS). However,
there is no mechanism for reconciliation of
unit-wise and district-wise despatch data with
corresponding data on receipts at the first
stocking point in the districts. We attempted
a limited reconciliation exercise on a sample
basis for 2008-09 (April 2008 to December
2008) which revealed that 48624 MT of
fertilizers valuing Rs.83 crore stated to have
been despatched by the manufacturing units
were not recorded a received at the 1st
stocking points in various states.
In our opinion, the requirement for
certification in Performa 'B' by the State
governments of sales of decontrolled
f e r t i l i z e r s f o r a g r i c u l t u r a l p u r p o s e s
(notwithstanding the inadequacies in the
certification process) is the only major control
over end-use of fertilizers.
Linking certification with release of balance
payment of 10/15 per cent (with the penal
clause providing for bank guarantee for 100
per cent of unadjusted concession) provided
clear incentive/disincentives for ensuring
timely submission of Performa 'B'. With the
removal of such a linkage from June 2007,
there is no longer adequate incentive to
ensure certification by the competent
authorities (viz. the State Governments) of
end-use of decontrolled fertilizers for
agricultural purposes. This resulted in
accu7mlation of outstanding Performa 'B' for
the years 2007-08 to 2009-10 of Rs. 50,587
crore.
Further, in most of the States, verification of
sales for agricultural purposes (which would
provide assurance of proper end-use of
subsidy) was non-existent or inadequate, as
it did not involve physical verification of stocks
or sales beyond the 1st
point sales,. And in
many cases not even verification of receipts,
invoices etc. Further, although the subsidy
was released on the basis of the receipt of
fertilizers at district level and the freight
102
DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS
subsidy was paid upto block level, there was
no state level mechanism for physical
verification of the confirmation of receipt at
district, block and consumer levels. We also
found deficiencies in licensing and other
arrangements for sale of fertilizers.
Records relating to the import of urea on
Government account for the period 2005-06
to 2008-09 from the Department of Fertilizers
and import of DAP by IPL on Government
instructions during 2007-08 from IPL were not
provided to audit. Based on the records
relating to fertilizer imports provided to us, we
found certain irregularities in import of DAP
by IPL, as well as certain discrepancies
between imports and corresponding supply
of DAP by IPL.
We found a disturbing trend of increasing
consumption of subsidised fertilizers (urea,
DAP, MOP etc.) by mixing units in several
States. This resulted in breaking of the
subsidy chain, since the prices of mixtures
fare generally higher and subject to varying
levels of license and regulation/ self-
regulation in different States. Further, the
fertilizer consumed by these mixing units is at
the expense of the ordinary farmer. Control
over quality of fertilizer mixtures is also
minimal, exposing unsuspecting farmers to
the risk of sub-standard quality mixtures.
4. Quality Control
We found that the fertilizer quality testing
infrastructure in the country was grossly
inadequate. The annual capacity of the
existing quality control laboratories was only
25 per cent of the required capacity for testing
of samples from all sales outlets twice a year
(i.e. once each for rabi and kharif). Further,
many of the laboratories were deficient in
terms of both physical and human
infrastructure. Consequently, there was
significant shortfall in the actual number of
samples tested vis-à-vis both the target as
well as the capacity of the laboratories. Also,
the stipulated time limits for sending of
samples to the quality control laboratories,
sending of analysis reports by the
laboratories to the concerned authorities and
corrective faction thereon were not adhered
to in most States, with huge delays. As a
result, even when sub-standard quality
fertilizer was detected, by the time the
analysis reports reached the concerned
authorities and action was initiated, the
balance stock of the fertilizer lot(pertaining to
the sub-standard sample) had already been
s o l d t o u n s u s p e c t i n g f a r m e r s , w h o
unknowingly used such sub-standard
fertilizers.
5. Results of Surveys of Farmers and
Dealers
The survey of 1092 fertilizer dealers revealed
several significant findings. 57 per cent of the
dealers indicated that they were not getting
the required quantity and type of fertilizers in
time. 37 per cent indicated that they were
facing problems in transportation in lifting
their requirement. Only 51 per cent
indicated that they were able to supply
fertilizers as pr demand to the farmers in time.
As many as 40 per cent of the dealers
indicated that samples had not been selected
in any of the last three years from their stock
for fertilizer quality testing.
The survey of 5498 farmers also threw up
important findings. 45 per cent of the
surveyed farmers indicated that they6 had
bought fertilizers at prices higher than the
MRPs, while 56 per cent indicated that they
did not know that MRPs for fertilizers fixed by
the Government. 59 per cent of the farmers
faced problems for getting their full
requirement of fertilizers in a timely fashion.
55 per cent of the surveyed farmers
expressed their need for fertilizers in small
quantity bags (contrarily, only 40 per cent of
ANNUAL REPORT 103
the surveyed dealers indicated that farmers
were demanding small quantity bags); 51 per
cent indicated that they did not have enough
money to buy their full requirement of
fertilizers.76 per cent of the surveyed farmers
had not got their soil tested for scientifically
ascertaining the requirement of fertilizers.
6. Conclusion
In spite of massive amounts of expenditure by
Gol on fertilizer subsidy/ concession, annual
production of fertilizers increased only
marginally from 284 lakh MT in 2003-04 to
298 lakh MT in 2008-09. Changes in the
subsidy regime, have failed to incentivize
significant increase in domestic production of
fertilizer. Overall, the increased consumption
of fertilizer is, thus, largely met through
increased fertilizer import.
The process for detailed assessment of
fertilizer requirements was flawed, with the
general practice being merely projections of
increases of 5 to 10 per cent over the previous
season's/ year's requirement. Further, first
p o i n t s a l e s w e r e b e i n g t r e a t e d a s
consumption for purposes of passing on
fertilizer subsidy.
There were significant deficiencies in
planning of fertilizer supplies, with several
instances of both over-supply and under-
supply at the district and lower levels, with
consequential excesses/shortages of the
required fertilizers at the time when the
farmers needed the same. Even the
prescribed checks for verification of sales of
decontrolled fertilizers by the State
Government sere largely restricted to first
point sales, and were not performed at block
and lower levels and to the ultimate
consumers i.e., the farmers. There was no
physical verification of sales and stocks (even
on a sample/percentage basis). The
consumption of subsidized fertilizers by
“mixing units” in different States represents a
major flaw in the “subsidy chain”, since these
units consu8me subsidized fertilizers, but sell
mixtures at higher rates and are subject to
v a r y i n g l e v e l s o f l i c e n s e / r e g u l a t i o n /
self=regulation in different States(without any
Central control).
We also found significant deficiencies in
quality control over subsidized fertilizers in
terms of inadequate/ poor infrastructure, lack
of adequate skilled manpower, and huge
shortfalls in testing of fertilizer samples.
Consequently, we find it difficult to derive
assurance that the huge expenditure incurred
o n f e r t i l i z e r s u b s i d y p a y m e n t t o
manufactures/ importers of fertilizers actually
result in full availability of high quality
fertilizers as per requirement at the stipulate
subsidized prices in a timely manner to the
farmers.
*****
104
DEPARTMENT OF FERTILIZERS MINISTRY OF CHEMICALS & FERTILIFERS