Adequate Availabilty of Fertlizers at APT Cost Through the Year
Contd……..3
Year End
Review
2013
|
There has
been adequate availability of Chemical Fertilizers throughout the country
during current year both for the Kharif and Rabi
Seasons. Demands have been met through domestic production and through imports
and timely supplies were made as required in all States.
Movement and
Distribution of Fertilizers
The
cumulative availability and Sales of Urea, DAP, MOP and NPK during the year
2013 (April’13 to November’13) in the country is as follows:
Name of Fertilizers
|
Availability
(in LMT)
|
Sales
(in LMT)
|
Urea
|
210.5
|
200.3
|
DAP
|
57.4
|
49.1
|
MOP
|
16.5
|
14.2
|
NPK
|
53.2
|
47.4
|
Details regarding the direct transfer of subsidy are
being worked out. The whole objective is to ensure the availability of
fertilizers to the farmer and to effectively reach the envisaged subsidy to
them.
Nutrient Based Subsidy (NBS) Policy
for Phosphatic & Potassic
P&K fertilizers
With a view to ensure
balanced use of fertilizers and to promote investment in fertilizer sector, the
Department of Fertilizers is implementing the Nutrient Based Subsidy (NBS)
Policy for decontrolled Phosphatic & Potassic (P&K) Fertilizers w.e.f.
1.4.2010. Under the NBS policy, a fixed rate of subsidy (in Rs. per Kg. basis)
decided on annual basis is provided to each grade of subsidized P&K
fertilizers depending upon its nutrient (N, P, K & S) content. Any variant
of the fertilizers under the NBS fortified with micronutrient Boron and Zinc, as
provided under the FCO, is eligible for a separate additional fixed subsidy.
Under the Policy the prices are allowed to be fixed by the fertilizer companies
at reasonable level. In order to ascertain the reasonableness of Prices fixed
by the fertilizer manufacturers/importers, they are mandatorily required to provide
subsidy cost data of their fertilizers products.
At present 22 grades of
P&K fertilizers, namely, DAP, MAP, TSP, MOP, Ammonium Sulphate
(produced by FACT), SSP including 16 grades of complex
fertilizers are covered under the NBS Policy. The subsidized fertilizers are
allowed for use in manufacturing of mixture and customised
fertilizers after their receipt in the District.
-2-
The Subsidy outgo in
P&K sector during the implementation of NBS policy w.e.f.
1.4.2010 has been contained and showing decreasing trends as can be
(in Rs. Crore)
Year
|
Subsidy on P & K fertilizers
|
2010-11
|
41500.00
|
2011-12
|
36107.94
|
2012-13
|
30576.12
|
2013-14 (BE)
|
29426.88
|
With the implementation of
NBS Policy, there is adequate availability of P & K fertilizers in the
country and subsidy outgo in P & K sector has also been contained. Prices
of P & K fertilizers remained stable during the year and were reported
lower as on November 2013 as compared to prices during previous year.
New
Pricing Scheme beyond Stage – III
The matter of formulation of policy
for the existing urea units beyond stage-III of New Pricing Scheme (NPS) is
under consideration of Group of Ministers (GOM) constituted to review the
fertilizers policy, the meeting of which was held on 5th June, 2013.
During the meeting, it was decided that further deliberations on the issues are
required before formulation of policy for existing urea units beyond New
Pricing Scheme.
At the beginning of this
calendar year on 2nd January, 2013 the Department of Fertilizers had notified
‘New Investment Policy- 2012’ with an eye on future requirements and to always make adequate supplies of
fertilizers in the country. It is expected that the demand of urea in the
country by the end of 12th Five Year Plan will be around 360 lakh MT. With the approval of this policy, nearly 100 lakh MT of additional urea capacity is expected to be added
in the country to an already existing indigenous capacity of 220 LMT and 20 LMT
from Oman India Fertilizer Company (OMIFCO) in Oman. An investment of nearly
Rs. 35,000 crores is proposed to be made during 12th
Five Year Plan period (2012-17). This will make country self reliant in
urea by end of 12th Five Year Plan. In response to the Policy, the Department of Fertilizers has
received over 15 proposals from companies in the private, cooperative and
public sector.
Currently consultations
are on to amend the New Investment Policy (NIP)- 2012
as the response to the NIP 2012 had been more than expected.
Meanwhile
the Cabinet Committee on Economic Affairs (CCEA) had also approved the proposal
regarding revival of five closed units of Fertilizer Corporation of India
Limited (FCIL) at Sindri, Talcher,
Ramagundam, Gorakhpur and Korba.
The CCEA in May 2013 approved the waiver of Government of India loan and
interest thereon amounting to Rs.10, 644/- crore for
the purpose. This would ensure positive net worth for FCIL and enable FCIL to
come out of the purview of BIFR, and hasten the process of revival of closed
units of FCIL.
Contd……..3
-3-
Revival of
closed units of HFCL/FCIL:-
(i) There are five closed units of Fertilizer Corporation of
India Ltd (FCIL) at Sindri, Talcher,
Ramagundam, Gorakhpur & Korba
and three closed units of Hindustan Fertilizer Corporation Ltd. (HFCL) at
Durgapur, Haldia and Barauni.
The cabinet had in 2008 approved revival of FCIL and HFCL units subject to
non-recourse to Government funding and to consider write off of GoI Loan and interest to the extent required. Cabinet
Committee on Economic Affair (CCEA) in 2011 approved revival of Sindri, Talcher and Ramagundam Units of FCIL on ‘nomination basis’ by the
nominated PSUs and Gorakhpur & Korba units of
FCIL and Durgapur, Haldia, Barauni
of HFCL through bidding route with the stipulation that Board for Industrial
and Financial Reconstruction (BIFR) proceedings be expedited. Cabinet also
approved the Draft Rehabilitation Scheme (DRS) for revival of all the Units of
FCIL and HFCL. DRS envisaged revival of Talcher Unit
by the consortium of M/s. Rashtriya Chemical &
Fertilizers Limited (RCF), M/s Coal India Limited (CIL), and M/s Gas Authority
of India Limited (GAIL), revival of Ramagundam Unit
by M/s. Engineers India Limited (EIL) and M/s. National Fertilizers (NFL)
Limited and revival of Sindri unit by M/s Steel
Authority of India Limited (SAIL). Proposal/action plan on revival of HFCL
units to be taken up once revival of FCIL units is on track.
(ii) The
revival process of closed units of FCIL is on.
For Talcher unit, it is proposed to establish
two joint venture (JV) companies viz. first company for upstream coal
gasification section, with GAIL being a major stakeholder and second company
comprising RCF, CIL and FCIL for downstream section of Ammonia-urea, Nitric
Acid, Ammonia Nitrate plants, off sites and utilities. The Memorandum of
Understanding (MoU) among consortium PSUs, i.e. CIL,
RCF, GAIL and FCIL, has been signed on 5/9/2013. For Ramagundam
Project, EIL & NFL are having discussions with the Technology providers and
selection of the same is in the final stage. EIL itself would take up the
Engineering and Project Construction for the project. For Sindri
unit, it has been decided to entrust the assignment of R&R activities at Sindri Unit to M/s. Project & Development India Limited
(PDIL) and PDIL have submitted their offer for assignment to SAIL on 20/09/2013
for their examination and approval, before Work Order is issued to PDIL for the
R&R activities.
Disinvestment
of RCF/NFL/FACT:-
As per amendment of the Securities
Contract (Regulation) Rules 1957, it is mandatory for the company to dilute its
shareholding to a minimum level of 10% of public equity by 8th
August 2013. Accordingly, 7.64% GOI shareholding in NFL, 12.5% of GOI
shareholding in RCF have been disinvested and 8.56% of GOI shareholding in FACT
has been transferred to Special National Investment Fund to be sold over a
period of five years.
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