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Fertilizer non-strategic sector says Govt; evokes rebuke from Parl panel

New Delhi, Dec 3: A report tabled in Parliament could add to the worries of the farmers facing fertilizer shortages. The report has said that the government could consider privatizing some of the ailing fertilizer manufacturing units following a decision to consider fertilizer as a ‘non-strategic sector’.

The Standing Committee Report on Chemicals and Fertilizers has pointed to a notification issued by the Department of Public Asset and Management (DIPAM) saying a communication has been issued in February this year about the framing of a new public sector enterprise policy wherein non-strategic sectors can even face closure wherever feasible.

The decision on financial restructuring as in the case of some fertilizer units such as Madras Fertilizer Limited will be taken after considering the Government Policy, the committee report has mentioned.

The policy measures have been shared by the Ministry of Chemical and Fertilizers in response to the queries from the Parliamentary committee members.

The decision has evoked strong condemnation from the members, demanding reconsideration of the move.

It has also hit out at the government for not holding consultations with the stakeholders including the fertilizer industry, farmers and others.

“Since fertilizer is a core sector concerning food security of the country and the coexistence of both public and private sectors in the field of fertilizer production is essential to boost the agricultural production, the Committee strongly recommend that the decision to declare fertilizer as a non-strategic sector should be reconsidered and this sector should be declared as a strategic sector. This recommendation of the Committee should be sent to Secretary, DIPAM for specific reply within three months of presentation of the report,” the committee has said, taking a strong stand on the issue.

The committee also regretted the fact that the Department of Fertilizers has not been able to convince DIPAM about the need for making fertilizers a strategic sector as the production of the required quantum of food grains is essential for meeting the needs of the huge population of the country.

It made this observation while voicing its discontent over the delay in the financial restructuring of Madras Fertilizer Limited and some other units.

In its deposition before the committee, the Department of Fertilizer informed that, at present, four units of Fertilizer Corporation of India Ltd such as Ramagundam, Talcher, Gorakhpur and Sindri and one unit of Hindustan Fertilizer Corporation Limited such as Barauni are being revived by setting up new Ammonia Urea plants of 12.7 Lakh metric tonne per annum capacity through the formation of Joint Venture Companies of nominated PSUs.

However, with regards to the revival of the Korba unit of FCIL and Haldia and Durgapur units of HFCL, the Department said that the decision will be taken based on the assessment of the demand-supply gap after operationalization of all these plants.

It stated that along with the revival of the old plants, some units have already come up. Two urea plants of 12.7 LMTPA Capacity each at Gadepan, Kota (Rajasthan) by M/s Chambal Fertilizers & Chemicals Ltd and at Panagargh (West Bengal) by M/s Matix Fertilizers & Chemicals Ltd have come up in the private sector. Therefore, Korba and Haldia units can face the threat of closure.

 As fat the Gorakhpur unit is considered, the Department informed that 91.2 per cent of the work had been completed by May this year. Some media reports have said that Prime Minister Narendra Modi will inaugurate the revived unit on December 7.  The Sindri unit is 89.4 complete and by Barauni unit is 88.7 per cent.