Centre holds back Rs 96 cr subsidy to GSFCL

The Centre has held back a payment of about Rs 96 crore of subsidy to state-run Gujarat State Fertiliser Corporation Ltd (GSFCL) because the company has been found diverting urea for making other chemicals.
However, GSFCL said it is allowed to use domestic urea for making melamine as per the industry licence given to the company by the government.
According to the sources in the Fertiliser Ministry, GSFCL has been found diverting molten urea for manufacturing melamine, a chemical which is mainly used by plastic industry and for making utensils.
Sources said, the ministry decided not to disburse Rs 96 crore urea subsidy payment to GSFCL.

When contacted, GSFC Managing Director Atanu Chakraborty confirmed that the company'a urea subsidy has been held back, but denied that the company has violated any rules by diverting molten urea for making melamine.
"Melamine plant of GSFCL has been set up as a consequence of initiative taken by the central government. According to industrial licence for the plant, it has been barred to use imported urea that means domestic urea to be used," Chakraborty said.

He also underlined that GSFCL uses costly gas for manufacture of urea used for making melamine.
At present, the maximum retail price of urea is fixed at Rs 5,360 per tonne, whereas the actual cost of production is around Rs 10,000-Rs 12,000 per tonne.

The difference is paid by the government to companies in the form of subsidy, so that farmers get the soil nutrient at an affordable price.
Fertiliser Ministry sources added that as per the government rules, urea is meant for use by farmers for agriculture activities only and the company is also using cheaper gas for it.
Molten urea ia a stage before the final stage of manufacturing of urea. At this stage the GSFCL is diverting the urea for making of melamine, the sources said.
GSFCL is diverting about 50,000 tonnes of urea for making melamine, they said adding that if this much urea was not diverted, import bill of the country could have been reduced by this much quantity.