The government today said it released subsidy on ammonium sulphate to Gujarat State Fertilizer Corporation (GSFC) in view of farmers interest as this nutrient is being produced only by two firms in India.
The government had stopped subsidy payment to GSFC in March 2013 as it found the company did not pass on the benefits to farmers for a certain period, which was challenged by the company immediately in the Delhi High Court.
The Chemicals and Fertilizers Ministry today issued a statement clarifying on reports alleging inconsistency in its decision to resume subsidy to GSFC.
The main Opposition Congress also on Friday attacked the Centre over resumption of subsidy to farmers in poll-bound Gujarat through GSFC, terming it an "election lollipop".
The Centre provides around Rs 70,000 crore annually as fertilizer subsidy to the manufacturers for selling nutrients at cheaper rates to farmers.
In an official statement, the ministry said the subsidy to GSFC on ammmonium sulphate (AS) was stopped by an order on March 18, 2013 on the grounds that the company had not passed on the benefits to the farmers.
The order also had directed recovery of subsidy already paid to GSFC with effect from April 1, 2010. GSFC filed a petition in the Delhi High Court against this order.
However, the company withdrew its case in March this year to enable the Department of Fertilizer to make recovery and take further action.
The matter of release of subsidy for the period from March 18, 2013 to March 5, 2017 is still under examination and no subsidy has been released to the company for this period yet, it said.
However, the ministry said, "the (fertilizer) department has released the subsidy in line with the orders of the High Court and in view of the benefits to the farmers since the Caprolactum Grade Ammonium Sulphate has been manufactured in India only by two companies i.e. Fertilizers and Chemicals Travancore (FACT) and GSFC."
The ministry said the Delhi High Court in its order dated March 2, 2016 asked GSFC to approach the Department of Fertilizer to reconsider the matter and submit requisite data.
GSFC's representation was forwarded to the Fertilizers Industry Coordination Committee (FICC), a subordinate office of the department.
"After the examination, the FICC found that the company has not fully passed on the benefits during 2010-11 and made undue profits. However, the company had passed on the benefits to the farmers during 2011-12 and 2012-13," it said.
The ministry then constituted an internal committee of senior officers to examine the analysis done by FICC.
"The committee after examination accepted the analysis done by FICC and recommended that the amount of Rs 33.78 crore may be recovered from the withheld subsidy amount of the company for April 1, 2010 to March 17, 2013," the statement said, adding that the panel recommended to provide subsidy with effect from March 6, 2017.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)