In a startling revelation the comptroller and Auditor General (CAG) of India in a report, tabled in Parliament last week has said that no significant investment was made in the fertiliser sector during 2010-14 period even after the launch of Nutrient Based Subsidy (NBS) scheme to promote the domestic industry. The NBS regime was introduced in April 2010.
CAG in its performance audit on ‘Nutrient Based Subsidy Policy for Decontrolled Phosphatic & Potassic Fertilisers’ said that during the period no significant investment was made in the fertiliser sector to increase either the number of fertiliser plants or their installed capacity of these fertiliser plants during 2010-11 to 2013-14.
It added that though the number of plants remained the same even in 2013-14, installed capacity increased marginally by 10.33 lakh tonne (LT) and 8.49 LT for DAP and complex fertiliser, respectively, during that year. During 2009-10 to 2013-14, the number of Di-Ammonium Phosphate (DAP) plants were static at 13, while that of complex fertilisers remained at 21.
CAG report also stated that actual production fell by 14 percent during the period 2009-10 to 2013-14, while production of complex fertiliser declined by 14 percent during 2009-10 to 2013-14, as it fell from 80.38 LT in 2009-10 to 69.13 LT during 2013-14. It added that there was no incentive for the companies to import raw material or intermediaries and produce finished goods, fertiliser companies preferred to import the finished product. CAG has recommended that DoF should take measures to encourage and enhance investment in the fertiliser sector in close coordination with Ministry of Finance. It also recommended early adoption of a result oriented approach to promote growth of domestic production of P&K fertilisers.