Govt considers harsh measures to curb fertiliser subsidy

Fertiliser companies have to submit with their subsidy claims, cost data of their products 2012-13 onwards

The fertiliser ministry has decided to embark upon some harsh measures to ensure reasonability of process of fertiliser in the country. The move comes from the fact that supply and consumption of fertiliser is one of biggest revenue burden on the country.

It has been made mandatory for the fertiliser companies to submit along with their subsidy claims, the cost data of their fertiliser products from 2012-13 onwards in prescribed format on six monthly basis. The Department has also appointed Cost. Accountants/ Firms on its own to scrutinise the said cost data.

In cases, where after scrutiny, unreasonableness of Maximum Retail Price (MRP) is established the subsidy would be restricted or denied even if the product is otherwise eligible for subsidy under NBS Scheme.

The primary criteria for assessing such unreasonableness is to study the correlation between the cost of production and MRP printed on the bags. In case where there is no correlation between the cost of production or acquisition and the MRP printed on the bags, subsidy payments to such companies will be stopped and enquiry will be done.

Besides, in proven case of abuse of subsidy mechanism, the Department of fertilisers, on the recommendation of Inter Ministerial Committee may exclude any grade/grades of fertilisers of a particular company or the fertiliser company itself from the NBS Scheme.

Under the fertiliser Control Order (FCO), the fertilisers companies are required to print the Maximum Retail Price (MRP) on each bag of fertiliser and no fertiliser company or dealer is supposed to sell or offer for sale any fertilisers at a price exceeding printed MRP.  Violation of this is punishable under Essential Commodities Act.

The State Governments are adequately empowered to take preventive/punitive actions for violation of any of the provisions of fertiliser Control Order (FCO) 1985 under Essential Commodities Act 1955. Overcharging is violation of EC Act.

According to officials, there is no scope under the NBS scheme for potash and phosphate ( P&K) fertilisers or New Pricing Scheme for Urea to claim huge subsidy indicating lower production. However, in respect of SSP manufactures, it has been made mandatory for minimum 50% capacity utilisation or 40,000.MT per annum of production to be eligible for subsidy under (NBS) scheme.

fertilisers are provided to farmers at subsidised rates irrespective of their category or land. However, the Government is already encouraging use of bio-fertilisers along with chemical fertilisers for increased productivity and balanced fertilization of soil.