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The Public Accounts Committee has found many deficiencies in the implementation of nutrient- based subsidy policy for non-urea fertilisers and said it has failed to promote balanced use of nutrients and cut subsidy.
It has also found irregularities in subsidy payment and sales of single super phosphate (SSP) without assessing the requirement and unjustified retail price fixed by companies.
The government in April 2010 launched the Nutrient-Based Subsidy (NBS) policy for phosphatic and potassic (P&K) fertilisers to promote balanced use of fertilisers and reduce use of urea.
"The policy has not made any progress towards achieving the objective. The committee is of the view that ... There should be a well defined road map for achieving the objective of the policy," PAC Chairman K V Thomas said in a report tabled in Parliament today.
The panel suggested the government to adopt a target-oriented approach without further delay and set specific timeline with a strong and in-built monitoring mechanism for the achievement of each of the objective.
Expressing concern over alarming rise in urea consumption, the PAC recommended that a proper urea policy need to be devised to ensure balanced use of fertilisers. It suggested that the states should be asked to create awareness among farmers.
The PAC also found that the government's effort to promote domestic industry was "inadequate" and asked the Centre to increase investments to boost the sector.
"The Committee also found irregularities like avoidable payment of subsidy, excess payment of lump sum freight subsidy for SSP, non-recovery of gains from P&K manufacturing companies for using cheaper gas, sale of SSP without assessing requirements, unreasonable loading of cost component on MRP, unjustified fixation of MRP etc," the report said.
The government pays about Rs 70,000 crore as fertiliser subsidy annually.
The PAC suggested the government to put in place a contingency plan for unforeseen events and unpredictable monsoon.
On fixing of MRP for non-urea fertilisers, the committee suggested the government to ask fertiliser companies to provide details of the cost components that are required to fix the subsidy.