GSFC calls fertiliser ministry's order unjustified, arbitrary

The ministry had passed an order to discontinue subsidy on Ammonium Sulphate to GSFC

In a strong reaction to the Union chemicals & fertilisers ministry’s move of discontinuing fertiliser subsidy for producing ammonium sulphate (AS) to Gujarat State Fertilizers & Chemicals Ltd (GSFC), the latter termed the order arbitrary and unjustified.

The state-run fertilisers major noted that “unjustified denial of subsidy to GSFC would compel the company to raise maximum retail price (MRP) of ammonium sulphate in line with the MRP being charged by other indigenous manufacturers which ultimately will deprive the farmers of cheap source of AS.”

The department of fertilisers, in an office memorandum dated March 18, 2013, had alleged GSFC for not passing on the subsidy benefit to farmers since April 1, 2010, despite claiming the same under the Nutrient Based Subsidy (NBS) Policy, thereby deciding not to pay any further subsidy to the company against any remaining or future claims on this grade of fertiliser.

Terming the order unjustified, GSFC stated, “It is contrary to the principles enshrined in Government of India order dated March 4, 2010 which defines the NBS scheme.”

“GSFC supplies cheapest AS in the market at the rate of Rs 7,500 per tonne (in Gujarat), its price is lower than that of central PSU Fertilisers and Chemicals Travancore Ltd (FACT) at Rs 11,013 per tonne and landed price of AS at around Rs 15,000 per tonne,” the GSFC clarified on the matter.

“Department of fertiliser has also acted against the interest of the farmers,” the company said, reacting to the order.

“NBS policy provides for fixed subsidy and leaves MRP up to the manufacturer. It does not take cost of production into account. Government order denying subsidy to GSFC thus violates the letter and spirit of the policy,” the company stated, adding that it is going to take up the matter at an appropriate forum.

The ministry had also called for a recovery of the subsidy already claimed by the company.

In its letter, it had stated, “After careful examination of the matter, it has been decided to recover the subsidy already paid to GSFC on account of ammonium sulphate from April 1, 2010 till date.”