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lR;eso t;rs

Government of India

Department of Fertilizers Ministry of Chemicals & Fertilizers

lR;eso t;rs

Government of India

Department of Fertilizers Ministry of Chemicals & Fertilizers

ANNUAL REPORT 2005-2006

Government of India

MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF FERTILIZERS

Contents

Introduction

Organisational Set Up and Functions

Development & Growth of Fertilizer Industry

Availability of Major Fertilizers During 2005-06

Plan Performance

Measures of Support for Fertilizers

Public Sector Undertakings and Cooperative Societies

Fertilizer Education Projects

Information Technology (IT)

Vigilance Activities

Right to Information Act, 2005

Progressive Use of Official Language Hindi

Welfare of SCs, STs, OBCs and Physically Handicapped Persons

Activities in the North-East Region

Women Empowerment

Annexures l to Xll

3-6

7

8-15

16-17

18-19

20-27

28-48

49-52

53-54

55

56

57-59

60

61

62-63

64-79

Chapter-1

2 3

A n n u a l R e p o r t 2 0 0 5 - 2 0 0 6 Department of Fertilizers, Ministry of Chemicals & Fertilizers

Hon'ble Union Minister of Chemicals & Fertilizers and Steel,

Sh. Ram Vilas Paswan, addressing the Meeting of the Fertilizer Advisory Forum.

( 7th March, 2006)

1.1.1 Agriculture, which accounts for 22% of GDP,

provides sustenance to two-thirds of our

population. Besides, it provides crucial backward

and forward linkages to the rest of the economy.

Successive five-year plans have laid stress on

self-sufficiency and self-reliance in foodgrains

production and concerted efforts in this direction

have resulted in substantial increase in agriculture

production and productivity. This is clear from the

fact that from a very modest level of 52 million MT

in 1951-52, foodgrain production rose to above

232.31 million MT in 2004-05. In India's success in

the agriculture sector, not only in terms of meeting

total requirement of foodgrains but also generating

exportable surpluses, the significant role played by

chemical fertilizers is well recognized and

established.

1.1.2 Keeping in view the vital role played by chemical

fertilizers in the success of India's green revolution

and consequent self-reliance in foodgrain

production, the Government of India has been

consistently pursuing policies conducive to

increased availability and consumption of

fertilizers in the country. As a result, the annual

consumption of fertilizers in nutrient terms (N, P &

K) has increased from 0.7 lakh MT in 1951-52 to

184 lakh MT, while per hectare consumption of

fertilizers, which was less than 1 Kg in 1951-52 has

gone up to the level of 96.7 Kg in 2004-05.

1.1.3 As of now, the country has achieved near self-

sufficiency in production capacity of urea with the

result that India could substantially manage its

requirement of nitrogenous fertilizers through the

i n d i g e n o u s i n d u s t r y. S i m i l a r l y, a d e q u a t e

indigenous capacity has been developed in

respect of phosphatic fertilizers to meet domestic

requirements. However, the raw materials and

intermediates for the same are largely imported.

As for potash (K) since there are no viable

sources/reserves in the country, its entire

requirement is met through imports.

Growth of Fertilizer Industry

1.2.1 The industry made a very humble beginning in

1906, when the first manufacturing unit of Single

Super Phosphate (SSP) was set up in Ranipet

near Chennai with an annual capacity of 6000 MT.

The Fertiliser & Chemicals Travancore Ltd. (FACT)

at Cochin in Kerala and the Fertilizer Corporation

of India (FCI) in Sindri in Bihar (now Jharkhand)

were the first large sized fertilizer plants set up in

the forties and fifties with a view to establish an

industrial base to achieve self-sufficiency in

foodgrains. Subsequently, the green revolution in

the late sixties gave an impetus to the growth of the

fertilizer industry in India and the seventies and

eighties then witnessed a significant addition to the

fertilizer production capacity.

1.2.2 The installed capacity as on 31.10.2005 has

reached a level of 120.61 lakh MT of nitrogen

(inclusive of an installed capacity of 205.12 lakh

MT of urea after reassessment of capacity of which

the non functional capacity is estimated at 3.30

lakh MT) and 56.20 lakh MT of phosphatic nutrient,

making India the 3rd largest fertilizer producer in

the world. The rapid build-up of fertilizer

production capacity in the country has been

achieved as a result of a favourable policy

environment facilitating large investments in the

public, co-operative and private sectors.

Presently, there are 57 large sized fertilizer plants

in the country manufacturing a wide range of

nitrogenous, phosphatic and complex fertilizers.

Out of these, 29 are urea units, 20 units produce

4 5


indigenous/imported rock phosphate and imported

DAP and complex fertilizers, 7 units produce

low analysis straight nitrogenous fertilizers and

9 manufacture ammonium sulphate as by-product.

Besides, there are about 64 medium and small-

scale units in operation producing SSP. The

sector-wise installed capacity is given in the

following table: -

Pradesh. These coal based plants have, however,

been closed by Government w.e.f. 1.4.2002 due to

technical and financial non-viability. With natural

gas becoming available from offshore Bombay

High and South Bassein, a number of gas based

ammonia-urea plants have also been set up since

1985. As the usage of gas increased and its

available supply dwindled, a number of expansion

indigenous / imported rock phosphate and imported

sulphur; domestic production based on imported

intermediates, viz. ammonia and phosphoric acid;

and import of finished fertilizers. During 2004-05

roughly 88% of the requirement of phosphatic

fertilizers was met through the first two options.

1.3.3 In the absence of commercially exploitable potash

sources in the country, the entire demand of

potassic fertilizers for direct application as well as

have grown steadily in tandem with the fertilizer

industry. These consultancy organisations are,

today, in a position to undertake execution of

fertilizer projects starting from concept / designing

to commissioning of fertilizer plants in India and

abroad.

1.4.2 A concept has been developed in the Department

to carry out research & development / basic

research work by mutual understanding between

Sector-wise, Nutrient-wise Installed Capacity of Fertilizer

Manufacturing Units as on 31.10.2005.

for production of complex fertilizers is met through

imports.

1.3.4 Given the volatility in international fertilizer market

in general, and the urea market in particular,

marginal provision through imports could be used

to the country's strategic advantage. This is also

desirable as the international market, especially in

case of urea, is very sensitive to the demand

supply scenario. Action for securing additional

supply of urea by permitting economically efficient

indigenous units to produce beyond their re-

assessed capacity to substitute imports, is also

being taken in the new pricing regime for urea

units, which is being followed since 01.04.2003.

Technological Advancements

industry and academic institutions, and the

Department has sponsored research and

development projects through the Indian Institute

of Technology, Delhi and Kharagpur under Science

& Technology activity for the development of

research / basic research in the field of fertilizer

industry. Action to widen the sphere of research

and development to encompass areas of fertilizer

usage, etc. is also under consideration.

1.4.3. The fertilizer plant operators have now fully

absorbed and assimilated the latest technological

developments, incorporating environmental

friendly process technology, and are in a position to

operate and maintain the plants at their optimum

levels without any foreign assistance and at

Self-Sufficiency in Fertilizer Sector

1.3.1 Out of the three main nutrients namely nitrogen,

phosphate and potash, required for various crops,

indigenous raw materials are available mainly for

nitrogenous fertilizers. The Government's policy

has hence aimed at achieving the maximum

possible degree of self-sufficiency in the

production of nitrogenous fertilizers based on

utilisation of indigenous feedstock. Prior to 1980,

nitrogenous fertilizer plants were mainly based on

naphtha as feedstock. A number of fuel oil/LSHS

based ammonia-urea plants were also set up

during 1978 to 1982. In 1980, two coal-based

plants were set up for the first time in the country at

Talcher, Orissa and Ramagundam, Andhra

projects came up in the last few years with dual

feed facility using both naphtha and gas. The

feasibility of making available Liquefied Natural

Gas (LNG) to meet the demand of existing fertilizer

plants and/or for their expansion projects along

with the possibility for utilising newly discovered

gas reserves is also being explored by various

fertilizer companies in India.

1.3.2 In the case of phosphates, the paucity of domestic

raw material constrains the attainment of self-

sufficiency in the country. Indigenous rock

phosphate supplies meet only 5-10% of the total

requirement of P2O5. A policy has, therefore, been

adopted which involves a mix of three options,

v i z . , d o m e s t i c p r o d u c t i o n b a s e d o n

1.4.1 To meet the demand of fertilizers in the country

through indigenous production, self-reliance in

design engineering and execution of fertilizer

projects is very crucial. This requires a strong

indigenous technological base in planning,

development of process know-how, detailed

engineering and expertise in project management

and execution of projects. With the continuing

support of the Government for research and

development as well as design engineering

activities over the years, Indian consultancy

organisations in the field of fertilizers, Project and

Development India Limited (PDIL) & FACT

Engineering and Design Organisation (FEDO)

international standards in terms of capacity

utilisation, specific energy consumption &

pollution standards. The average performance of

gas based plants in the country today is amongst

the best in the world. The fertilizer industry is also

carrying out de-bottlenecking and energy saving

schemes in their existing plants to enhance the

capacity and reduce the specific energy

consumption per tonne of product. Companies

are also planning to convert their existing Naphtha-

based fertilizer plants to Liquefied Natural Gas

(LNG).

1.4.4 The country has also developed expertise for

fabrication and supply of major and critical

equipment such as high pressure vessels, static

6 7


international market.

2.1.2 The Department is broadly divided into 4 Divisions the PSUs under the Department.

dealing with (i) Fertilizer Projects and Planning, (ii) 2.1.6 A list containing the names of Minister-in-charge

Fertilizer Imports, Movement and Distribution, (iii) and the officers up to the level of Deputy Secretary

Administration and Vigilance and (iv) Finance and who are working / have worked in the Department

Accounts. Two Joint Secretaries, an Economic during 2005-06 is given in Annexure-II.

and rotating equipment, distributed control system

(DCS), heat exchangers and hydrolyser for

Concessions / Incentives on Import of Capital Goods for Fertilizer Industry

Chapter-2

Organisational Set Up and Functions

fertilizer projects. The indigenous vendors are now

in a position to compete and secure orders for such

equipment both in India & abroad under

International Competitive Bidding (ICB) procedure.

Presently, about 70% of the equipment required for

a major domestic fertilizer plant are designed and

manufactured indigenously.

1.4.5 A significant development / advancement has also

been made in the country in the field of

manufacturing of catalysts of various ranges by our

catalyst manufacturing organisations like PDIL.

P D I L i s i m p l e m e n t i n g t h e s c h e m e s f o r

enhancement of capacity and technological

upgradation in their existing catalyst plant and

other utilities at Sindri to compete in the


1.5.1 To encourage investment in the fertilizer sector,

concessional customs duty on import of capital

goods for setting up of new plants / substantial

expansion / renovation / modernisation of existing

plants is available to the domestic industry.

2.1.1 The main activities of Department of Fertilizers

( D O F ) i n c l u d e p l a n n i n g , p r o m o t i o n a n d

development of the Fertilizer Industry, planning

and monitoring of production, import and

distribution of fertilizers and management of

financial assistance by way of subsidy /

concession for indigenous and imported fertilizers.

Adviser, and an Additional Secretary/Joint

Secretary-cum-Financial Adviser handle the work

of these divisions.

2.1.3 Joint Secretary (Fertilizers) is entrusted with the

work pertaining to planning of fertilizer production

and development of fertilizer industry, which

includes pricing policy for urea units, and issues

relating to availability of raw materials such as

natural gas, fuel oil and naphtha. In respect of

PSUs, the Joint Secretary (Fertilizers) is

concerned with joint venture projects, external

assistance for new fertilizer projects, revival /

rehabilitation of sick fertilizer units and company

affairs.

2.1.4 The Joint Secretary in-charge of Administration

and Movement also looks after the work of

monitoring and assessment of production, import,

movement and distribution of fertilizers,

administration and management of concession

scheme for decontrolled phosphatic and potassic

fertilizers. The Joint Secretary (Administration &

Movement) also attends to grievances of the public

and the employees of the Department and

functions as the Chief Vigilance Officer (CVO) of

the Department.

2.1.5 The Economic Adviser (EA), an officer of the level

of Joint Secretary, advises the Department on

various economic issues like creation of additional

capacity, pricing and costing of fertilizers. EA also

deals with functions pertaining to bio-fertilizers,

micronutrients, organic-manure, and co-ordinates

the quarterly review meetings (QRMs) in respect of

Fertilizer Industry Coordination Committee (FICC)

2.2.1 The office of Fertilizer Industry Coordination

Committee (FICC) is an attached office under the

Department of Fertilizers headed by an Executive Director,

who is of the rank of Joint / Additional Secretary to the

Government of India. The FICC comprises the

Secretaries to the GOI in the Department of Fertilizers,

industrial Policy and Promotion, Agriculture and

Cooperation, Expenditure, Ministry of Petroleum & Natural

G a s , C h a i r m a n , Ta r i f f C o m m i s s i o n a n d t w o

representatives of the urea industry. FICC, which was

initially constituted w.e.f. 1.12.1977 to administer and

operate the erstwhile Retention Price-cum-subsidy

scheme (RPS), has been made responsible through

Resolution dated 13.3.2003 to administer and operate the

New Pricing Scheme (NPS) pertaining to urea, which has

come into existence w.e.f. 1.4.2003.

Public Sector Undertakings And Multi-State Co-operative Societies

2.3.1 The Department has under its administrative

control ten public sector undertakings (PSUs), one

multi-state co-operative society and one joint

sector company. The list is given at Annexure III.

Sh. Ram Vilas Paswan, garlanding statue of Chhatrapati Shivaji during his visit to RCF, Thal

8 9


Chapter-3

Development and Growth of Fertilizer Industry

UREA UNITS SET UP BETWEEN: 1951-1999 WITH REASSESSED CAPACITY

Capacity Build-Up

3.1.1 At present, there are 57 large size fertilizer units in

the country manufacturing a wide range of

nitrogenous, phosphatic and complex fertilizers.

Of these, 29 are urea units, 20 units produce DAP

and complex fertilizers, 7 units produce low

analysis straight nitrogenous fertilizers and 9

manufacture ammonium sulphate as by-product.

Besides, there are about 64 small and medium

scale units in operation producing single super

phosphate (SSP). The total installed capacity of

fertilizer production was 119.60 lakh MT of nitrogen

and 53.60 lakh MT of phosphate as on 31.03.2004.

This has marginally increased to120.61 lakh MT of

nitrogen and 56.20 lakh MT of phosphate as on

31.10.2005.

Production Capacity and Capacity Utilisation

3.2.1 The production of fertilizers during 2004-05 was

113.38 lakh MT of nitrogen and 40.67 lakh MT of

phosphate. The production target for 2005-2006

has been fixed at 118.07 lakh MT of nitrogen and

47.02 lakh MT of phosphate, representing a

growth rate of 4.4% in nitrogen and 15.6% in

phosphate, as compared to the actual production

in 2004-2005. Production target for nitrogenous

fertilizer is less than the installed capacity because

of low production by Rashtriya Chemicals &

Fertilizers (RCF), Trombay and Brahmaputra

Valley Fertilizer Corporation Ltd. (BVFCL),

Namrup due to gas limitations and equipment

problems. Similarly, the production of phosphatic

fertilizer is less than installed capacity due to

constraints in availability of raw materials /

intermediates which are substantially imported.

However, taken together, the production of 'N' and

'P' during the year was higher than that in the

corresponding period of last year.

3.2.2 The production performance of both nitrogenous

and phosphatic fertilizers during 2004-05 year was

less than the target mainly due to constraints in

supply and quality of natural gas, equipment

breakdowns, delay in commissioning of Namrup-II,

RCF Trombay-V, and DIL Kanpur having remained

under unscheduled shutdown. In case of

phosphate, production in DAP plants was low on

account of shortage of phosphoric acid and

imported ammonia. Similary, production of

complexes was also low due to shortage of raw

materials i.e. phosphoric acid and ammonia.

Note: @ After revamp

10 11


The following 9 urea plants are presently closed / under shutdown due to various reasons, inter-alia, on account of technological obsolescence, feedstock limitation, non-viability of unit / company and heavy financial losses.

Note: Two urea units have suspended production for the last three years namely RCF-Trombay-V (3.3 LMT) due to shortage of natural gas and DIL-Kanpur (7.22 LMT) due to financial constraints.

Projects Under Implementation

3.4.1 Brahmaputra Valley Fertilizer Corporation Ltd., is

implementing a major revamp of its Namrup unit in

Assam in the North Eastern Region of the country,

at an approved completion cost of Rs.610.24 crore

to increase urea production to 5.55 lakh tonnes per

annum. Namrup-III unit and one stream of

Namrup-I (partially) were commissioned in March

& May 2002, respectively. Namrup-II unit of BVFCL

has been commissioned following the completion

of revamp w.e.f. November 2005.

Feedstock Policy

3.5.1 At present, natural gas based plants account for

around 65% of urea capacity, naphtha is used for

around 24% urea production and the balance

capacity is based on fuel oil and LSHS as

feedstock. The two coal based plants at

3.5.4 In this context, the aspect of availability and pricing

of feedstock also becomes important, considering

that the cost of feedstock constitutes about 60 to

75% of the total cost of production of urea - in

respect of gas based units, it accounts for 60% of

cost of production, whereas in the case of naphtha

and FO/LSHS based units, it accounts for around

75% of the cost of production.

3.5.5 There is also a very considerable difference

between the prices of NG/LNG and Naphtha and

FO / LSHS. As compared to the present price of NG

/ LNG which ranges from US $ 2.6 to 5.0 per

MMBTU, the prices of Naphtha and FO / LSHS are

the equivalent of US$ 13-15 and US $ 9-11 per

MMBTU respectively.

3.5.6 Although natural gas is the preferred feedstock for

production of urea, due to dwindling supplies of

Administered Price Mechanism (APM) gas, gas

3.2.3 The domestic fertilizer industry has by and large

attained levels of capacity utilisation comparable

with others in the world. The capacity utilisation

during 2004-05 was 94.0% for nitrogen and 72.2%

for phosphate. The estimated capacity utilisation

during 2005-06 is 94.9% of nitrogen and 73.2% of

phosphate. Within this gross capacity utilization,

the capacity utilisation in terms of the urea plants

was 104.2% in 2004-05 and is estimated to be

103.7% in 2005-06. As for phosphate fertiizers,

apart from the constraints mentioned earlier, the

actual production capacity utilisation has also been

influenced by the demand trends.

3.2.4 The capacity utilisation of the fertilizer industry,

particularly in respect of urea, is expected to

i m p r o v e f u r t h e r t h r o u g h r e v a m p i n g /

modernisation of the existing plants.

3.2.5 The unit-wise details of installed capacity,

production and capacity utilisation during 2004-05

and 2005-06 (estimated) are given in Annexure-

IV.

Strategy For Growth

3.3.1 The following strategy has been adopted to

increase fertilizer production:

l Expansion and capacity addition/efficiency

enhancement through retrofitting / revamping of

existing fertilizer plants.

l Setting up joint venture projects in countries having

abundant and cheaper raw material resources.

l Working out the possibility of using alternative

sources like liquefied natural gas, coal gasification,

etc., to overcome the constraints in the domestic

availability of cheap and clean feedstock,

particularly for the production of urea.

l Looking at possibilities of revival of some of the

closed units by setting up brownfield units subject

to availability of gas.

Ramagundam and Talcher were closed down due

to technological obsolescence and non-viability.

3.5.2 Natural gas has been the preferred feedstock for

the manufacture of urea over other feedstocks viz.

naphtha and FO / LSHS, firstly, because it is a

more efficient and clean source of energy and

secondly, it is considerably cheaper and more cost

effective in terms of manufacturing cost of urea as

compared to the other feedstocks, which also has

a direct impact on the quantum of subsidy on urea.

3.5.3 Accordingly, the policy announced in January 2004

provides that new urea projects, expansion of

existing urea units and capacity increase through

de-bottlenecking / revamp / modernization will be

allowed/recognized if the production comes from

using natural gas / LNG as feedstock. For the

same reasons, a policy for conversion of the

existing naphtha / FO/LSHS based urea units to

natural gas / LNG as feedstock has also been

formulated in January 2004, which encourages

early conversion to natural gas / LNG.

based units have been facing shortage of natural

gas. Against the total requirement of 33.01

MMSCMD of gas for the existing gas based units,

the actual average supply during 2004-05 was

23.79 MMSCMD only. With the commissioning of

the LNG terminal of Petronet LNG Ltd. and

commencement of supplies of RLNG to

consumers w.e.f. 1.4.2005, the gas based urea

units along the HBJ pipeline have received 7.6142

MMSCMD of R-LNG during the period April-

September, 2005 and the average actual supply of

gas to urea units during April-September, 2005

increased to 28.0089 MMSCMD. The shortfall in

supply of natural gas for units along HBJ pipeline

has, therefore, been significantly reduced.

However, the availability of gas in terms of the total

requirement with reference to the requirements of

existing units, expansion, de-bottlenecking /

revamp / modernization proposals and for

conversion of naphtha and FO / LSHS based units

continues to be a matter of concern.

12 13


3.5.7 The burgeoning demand for natural gas by sectors

such as fertilizers, power, transport etc. has

resulted in efforts to increase domestic gas supply,

through the public sector companies as well as

private companies / joint ventures through step up

in exploration activities, increased production from

existing fields, and bridging the gap between

demand and supply through imported LNG.

Constitution of Inter-Ministerial Group On Pricing and Availability of NG / LNG to Fertilizer Sector

3.6.1 An Inter-Ministerial Group (IMG) has been

constituted under the chairmanship of Finance

Minister to examine issues related to supply of

natural gas and LNG to fertilizer industry. The IMG

has been mandated to examine and work out a

framework for preferential allocation of domestic

natural gas to the fertilizer industry and making

available imported LNG to fertilizer units, its pricing

and related taxation issues. Based on decisions

taken by the IMG, the issue of reasonableness of

pricing of various components of Re-gasified-LNG

(RLNG) being marketed by PLL (post FOB price)

was referred to the Tariff Commission. The Tariff

Commission has recently submitted the final report

and the same have been examined in the

Department. It is expected that the matter will be

considered by the IMG shortly.

3.6.2 In the meanwhile, as a part of the recently

formulated policy on natural gas allocation and

prices, the Government has decided that all

available APM gas would be supplied to only the

power and fertilizer sectors against their existing

allocations after meeting the requirements of

specific end users as per commitments under

various court orders.

3.6.3 As per the directives of the IMG the Department of

Fertilizers had also constituted a Core Group on

30.7.2004 under the chairmanship of Director

General, Fertiliser Association of India with

representatives from urea companies, Department

of Fertilizers, Ministry of Petroleum & Natural Gas

and Ministry of Shipping for exploring the options of

delivery of LNG through direct import by the

fertilizer industry by forming a consortium as

against the purchase of LNG from suppliers at the

presently quoted prices; feasibility of creation of its

own infrastructure vis-à-vis utilizing the existing

infrastructure of PLL and GAIL on hire / rent basis;

means of ownership and financing of the proposed

LNG project of the fertilizer industry; negotiations

with other LNG suppliers if the LNG procured by

fertilizer industry is not adequate; and any other

options which, in the opinion of the Core Group,

could be feasible.

3.6.4 The Core Group, in its report submitted in March

2005, opined that additional quantities of R-LNG

can become available only after commissioning of

the re-gasification terminal of Shell at Hazira and

expansion of the capacity of the PLL terminal at

Dahej. Moreover, in view of the tight supply

situation of natural gas and firming up of energy

prices all over the world, it may not be possible at

this stage for the present Core Group or any other

group of fertilizer companies to obtain firm

commitments for LNG supplies at various locations

a t t h e i r l e v e l . H e n c e , t h e C o r e G r o u p

recommended that individual companies may

continue to make their own arrangements for their

requirements of NG / LNG as and when supplies

are available at the desired locations, and that the

Government of India should continue to intervene

in allocation and price of NG / LNG till a regulator

for the sector is established.

3.6.5 The Department is in constant interaction with the

Ministry of Petroleum & Natural Gas, GAIL (India)

Limited and other prospective suppliers of NG /

LNG so that the gas requirements of the fertilizer

industry are met adequately. The gas supply

scenario is going to change in a big way in the

coming years on account of new gas finds, efforts

to import LNG from gas rich countries by gas

companies both in public and private sector, and

possibilities of importing gas through trans-

national pipelines from countries such as Iran,

Myanmar, etc. Indications are that, by 2010-11,

while the availability of present APM gas supplied

by ONGC would decline, the supply from domestic

Joint Venture and private suppliers will rise, and

the quantum of LNG import from suppliers such as

Qatar, Shell and Iran will increase substantially.

3.6.6 In this scenario, the Department is making efforts

to ensure that in the years to come a substantial

portion of the additional NG/LNG is made available

on priority to its various fertilizer units located in all

parts of the country. This includes not only the

presently functional 28 urea units, but also the

additional urea capacity that is likely to come up in

the future by way of greenfield projects / brownfield

expansion, de-bottlenecking and revamp projects

as well as possible revival of closed units.

Joint Ventures Abroad

3.7.1 Due to constraints in the availability of gas, which is

the preferred feedstock for production of

nitrogenous fertilizers and the near total

dependence of the country on imported raw

materials for production of phosphatic fertilizers,

the Government has been encouraging Indian

companies to establish joint venture production

facilities, with buy back arrangement, in other

countries, which have rich reserves of natural gas

and rock phosphate.

3.7.2 The Government of India (GOI), Indian Farmers

Fertiliser Cooperative Ltd. (IFFCO) and Southern

Petrochemicals Industries Corporation Ltd. (SPIC)

are equity partners in a joint venture company set

up in Senegal for production of phosphoric acid.

The initial equity contribution of the Indian

consortium in the venture in 1980 amounted to

Rs. 13.67 crore, ie. about 18.20% of its total equity.

At present, the Indian sponsors together hold

27.28% equity (GOI-7.72%, IFFCO-18.34% and

SPIC-1.22%), in the Joint Venture Company in

Senegal named Industries Chimiques du Senegal

(ICS). The company has a capacity to produce

6.60 lakh tonnes of phosphoric acid per annum and

finished phosphate fertilizers in its plants in

Senegal. A major portion of the phosphoric acid

produced in the ICS plant is being utilized for

production of phosphate fertilizers in the country

through long term buy back arrangement with

IFFCO.

3.7.3 SPIC, Jordan Phosphates Mines Company Ltd.

(JPMC) and Arab Investment Company (AIC) have

set up a joint venture project in Jordan to produce

2.24 lakh tonnes of phosphoric acid per annum.

52.17% of the equity of the joint venture named

Indo Jordan Chemicals Company Limited is held

by SPIC, 34.86% by JPMC and 12.97% by AIC.

The plant had been commissioned in May 1997.

The phosphoric acid produced by this venture is

imported by SPIC.

3.7.4 A Joint venture IMACID (Indo Moroc Phosphore

SA) between Office Cherifien Des Phosphates

(OCP), Morocco and Chambal Fertilizers &

Chemicals Ltd. (CFCL) to produce 3.30 lakh

tonnes of phosphoric acid per annum was

commissioned in Morocco in October 1999. After

completion of first the phase of revamp/

debottlenecking project during 2004, the capacity

has been increased to 3.65 lakhs tonnes per

annum. The equity of US$ 65 million in the venture

was held by OCP & CFCL equally. Subsequently in

May 2005, both OCP & CFCL have sold one-third

of their equity stake in IMACID to TATA Chemicals


Limited, India, to induct it as third equal joint

venture partner in IMACID.

3.7.5 IFFCO & KRIBHCO along with Oman Oil Company

have set up a joint venture urea project in Oman for

production of 16.52 LMT of urea and 2.48 LMT of

surplus merchant ammonia per annum. The US$

320 million equity of Oman India Fertilizer

Company (OMIFCO) is held by the Oman Oil

Company (50%) and IFFCO & KRIBHCO (25%

each). The implementation of the project was

commenced on 15.8.2002 and the commercial

production has started w.e.f. 14th July 2005. The

plant was formally inaugurated on 28th January

2006. OMIFCO is supplying its urea to the

Government of India at fixed Long Term Prices for a

period of 15 years, and ammonia to IFFCO for 10

years at a fixed price under long term buy-back

agreement.

Overseas Joint Ventures Under Implementation / Consideration:

3.8.1 SPIC is in the process of setting up a gas-based

nitrogenous fertilizer plant at Dubai in United Arab

Emirates to produce 4.00 lakh MT of urea per

annum at an estimated cost of US$ 170 million. The

joint venture company by name SPIC Fertilisers

and Chemicals Limited, incorporated in Mauritius is

promoted by SPIC with equity participation of US $

22.64 million and Emirates Trading Agency of UAE

with equity holding of US $ 6.4 million. The project

is under implementation and is expected to be

commissioned during the second quarter of 2007,

and urea produced is proposed to be imported by

SPIC through a firm buy back arrangement.

3.8.2 Indian Farmers Fertiliser Cooperative Ltd. (IFFCO

and El Nasr Mining Co. (ENMC) have formed a

Joint Venture Company, the 'Indo Egyptian

Fertiliser Company on 15th November 2005 for

setting up a phosphoric acid plant in Egypt, with an

installed capacity of 0.5 million tonnes of P205 per

annum. The estimated cost of the Project is USD

325 million, which is expected to be financed with a

debt: equity ratio of 67: 33. IFFCO and its Affiliates

would hold the majority equity shareholding of 76%

while ENMC and its affiliates would hold the

balance equity of 24% in the Joint Venture

Company. ENMC, the largest Rock Phosphate

Mining Company of Egypt will supply Rock

Phosphate, the basic raw material of the Project

and IFFCO will buy back the entire Phosphoric

A c i d p r o d u c t i o n . T h e t a r g e t d a t e f o r

commencement of construction is mid 2006. The

project construction period is estimated to be 36

months and the plant is expected to achieve

commercial production by the year 2009.

will take 15% each. Balance fund will be raised

through borrowings. The project is expected to be

commissioned by June 2008.

Hon'ble Union Minister of Chemicals & Fertilizers and Steel, Sh. Ram Vilas Paswan, at the inauguration of the OMIFCO Plant at Sur,

Oman ( 28th January 2006)

3.8.3 Gujarat State Fertilizers & Chemicals Ltd. (GSFC)

and Coromandal Fertilizers Ltd. (CFL) alongwith

Groupe Chimique Tunisien (GCT) & Compagnie

Des Phosphates De Gafsa (CPG) are setting up a

joint venture project in Tunisia for production of

3,30,000 MTS of Phosphoric Acid per annum. The

JV will sell its full production to both the above

Indian parties. An MOU to this effect was signed in

October, 2005 between GSFC & GCT/CPG. The

cost of the project is US $ 165 million +_ 5%

(excluding working capital component estimated at

US$ 25 million). The estimated equity of the JV is

US$ 66 million, wherein GCT/CPG- the Tunisian

partners will take 70% share while GSFC & CFL

14 15


Chapter-4

Availability of Major Fertilizers During 2005-06

country's requirement of DAP during Rabi

2005-06.

The distribution of imported urea is made keeping

in view the requirements of each of the States.

Controlled Fertilizer - Urea

4.1.1 The availability of urea, which is the only fertilizer

under price and partial movement control of

Government, remained satisfactory throughout the

Kharif 2005 season and so far during Rabi

2005-06.

Kharif 2005

4.1.2 The field opening stock of 9.84 lakh MTs as on

1.4.2005 coupled with indigenous production of

101.19 lakh MTs and imports of 5.17 lakh MTs

helped in ensuring adequate availability to the

States throughout the season. The cumulative

availability of urea at the end of the season was

nearly 116.20 lakh MTs against the assessed

requirement of 114.39 lakh MTs. The actual sales

of 107.66 MTs urea during Kharif 2005 were higher

by about 10% over sales of 97.81 lakh MTs in

Kharif 2004.

Rabi 2005-06

4.1.3 The requirement of urea for Rabi 2005-06 has

been assessed at 119.86 lakh MTs envisaging a

growth of about 11.32% over the sales of 107.67

lakh MTs in Rabi 2004-05. The requirement would

be met from the opening stocks of about 8.53 lakh

MTs, estimated production of 104.91 lakh MTs and

imports of about 14.51 lakh MT during the season.

Thus the cumulative availability of urea for Rabi

has been estimated to be about 127.91 lakh MTs

by the end of 31st March, 2005.

4.1.4 Allocation of urea was restricted to 50% of

production of installed capacity of each

manufacturer during Kharif 2005 and Rabi 2005-

06. The manufacturers are free to sell the

remaining quantity of urea to the farmers anywhere

16

in the country at notified maximum retail price

(MRP).

Decontrolled Fertilizers DAP & MOP

4.2.1 In the case of fertilizers other than urea, which are

decontrolled, no allocation is made under E.C. Act

by the Central Government. Assessment of

requirement of Urea, DAP and MOP is being made

by the Department of Agriculture & Cooperation to

enable better monitoring of availability and

supplies at the national level. While imports of

decontrolled fertilizers are freely allowed, imports

are also made on government account to bridge

the gap between demand and supply by way of

buffer stocks.

Kharif 2005

4.2.2 DAP and MOP are the two major decontrolled and

decanalised fertilizers, which are freely imported.

In Kharif 2005, 11.77 lakh MTs of DAP and 18.88

lakh MTs of MOP were imported.

4.2.3 The imports of DAP coupled with indigenous

production of 20.78 lakh MTs and the opening

stock of 4.26 lakh MTs of DAP as on 1st April, 2005

resulted in satisfactory availability of about 36.81

lakh MTs DAP during Kharif 2005 season. The

sales of 25.19 lakh MTs DAP were higher by 6%,

and in case of MOP, the sales of about 15.00 lakh

MTs were higher by about 3% as compared with

the sales in Kharif 2004 season.

Rabi 2005-06

4.2.4 The production of DAP during Rabi 2005-06 is

estimated to be about 24.52 lakh MTs. With DAP

stocks of 11.53 lakh MTs DAP as on 1.10.2005

coupled with adequate imports there has not been

any significant problem so far in meeting the

4.2.5 Similarly, with stocks of 5.57 lakh MTs MOP as on

1.10.2005 coupled with adequate imports till

October, 2005, there had not been any problem so

far in meeting the country's requirement of MOP

during Rabi 2005-06.

4.2.6 The following table summarizes the season-wise

position in respect of the availability and sales of

the major fertilizers i.e. Urea, DAP and MOP during

the last three seasons:

Movement of Fertilizers

4.3.1 Under the Allocation of Business Rules, the

Department of Fertilizers has been entrusted the

responsibility of ensuring movement, distribution

and allocation of controlled fertilizer, i.e. urea, from

various fertilizer plants and ports in accordance

with the State-wise assessment made by the

Department of Agriculture & Co-operation (DAC).

* Figures are up to 31.1.2006 $ Excluding silo stock & stock at shiphold

4.3.2 The major share in transportation of fertilizers is of

the Railways. During 2004-05, Railways had

moved about 73.15 per cent of the fertilizers

produced and / or imported into the country. In

2005-06, so far, the demand of railway wagons for

the transportation of fertilizers has been fully met.

During April-September 2005, 149.70 lakh MTs of

fertilizers was moved by the Railways as against

135.90 lakh MTs in the corresponding period of

2004-05.

4.3.3 Judicious management of the demand-supply

balance has helped in reducing the average lead of

fertilizer movement by rail. During 2004-05 the

average lead was 845 KMs. During the current

year the average lead for the period April -

September, 2005 is 824 KMs whereas it was 831

KMs during the corresponding period last year.

(Figures in lakh MTs)

17


Chapter-5

Plan Performance

crore was approved by the Planning Commission,

under Plan and Rs.17287.00 crore under Non-

5.1.1 The installed capacity and production of fertilizers

in the country at the end of Eighth Five Year Plan, in

the terminal year of the Ninth Plan and at the

beginning of 4th year of Tenth Plan (2004-05) are

indicated below:

Plan to 120.61 lakh MT and 29.05 lakh MT to 56.20

lakh MT, respectively, in the fourth year of the Tenth

Plan.

5.1.3 The production of fertilizers in nutrient terms during

2004-05 was 113.38 lakh MT of nitrogen and 40.67

lakh MT of phosphate. Sector-wise targets and

with Rs. 905.48 crore to be met out of IEBR and

balance amount of Rs.111.82 crore as budgetary

support. The details of Plan outlays are given in

Annexure IX.

5.2.3 The outlay for 2006-07 is Rs. 985.03 crore, of

which as amount of Rs. 886.22 crore will be met

from the internal and extra budgetary resosurces

plan. The details of Non-Plan and Plan provisions

in 2005-06(BE), 2005-06(RE) and 2006-07(BE)

are given in Annexure X.

Installed Capacity and Producton of Nitrogenous and

Phosphatic Fertilizers in Eighth, Ninth and Tenth Five Year Plans. (In lakh MT)

and the balance amount of Rs. 98.81 crore will be

provided by way of budgetary support. The

internal and extra budgetary resources would

consist of National Fertilizers Ltd. (Rs. 59.02

crore), Project and Development India Ltd.

(Rs. 2.00 crore), Rashtriya Chemicals & Fertilizers

Ltd. (Rs. 237.70 crore), FCI-Arawali Gypsum and

Minerals India Ltd. (Rs. 1.50 crore), and Krishak

Bharati Cooperative Ltd. (Rs. 586.00 crore). The

budgetary support will be for Fertilizers And

Chemicals Travancore Ltd. (Rs. 30.00 crore),

Brahmaputra Valley Fertilizers Corporation Ltd.

(40.86 crore), Madras Fertilizers Ltd. (Rs. 9.00

crore) and other Departmental Schemes

(Rs. 18.95 crore). Under other Department

Schemes, there is a provision of Rs. 12.95 crore for

Rainfed Farming Project of Krishak Bharati

5.1. 2 The installed capacity of nitrogen and phosphate in

the terminal year (1996-97) of the eighth plan was

97.77 lakh MT and 29.05 lakh MT, respectively.

Three major phosphatic fertilizer plants were

commissioned during the Ninth Five Year Plan

period, namely, Oswal Chemicals & Fertilizers

Ltd.-Paradeep, Indo-Gulf Corporation-Dahej and

Gujarat State Fertilizers Company Ltd.-Sikka-II.

Consequent upon reassessment of urea capacity

on the basis of Dr. Y.K. Alagh Committee report,

and DAP capacity by Tariff Commission, despite

phasing out of 8 urea units due to closure, the

installed capacity of nitrogen and phosphate

increased from 97.77 lakh MT at the end of Eighth

achievements in respect of production and

capacity utilization from 1998-99 onwards are

given in Annexures-VI & VII.

Plan Outlays

5.2.1 For the Tenth Plan (2002-07), Planning

Commission approved an outlay of Rs.5900.00

crore consisting of Rs.975.00 crore as Domestic

Budgetary Support, Rs.75.00 crore as External Aid

routed through Budget and Rs.4850.00 crore to be

met out of Internal & Extra Budgetary Resources

(IEBR).

5.2.2 For the year 2005-06, a plan outlay of Rs.1017.30

Cooperative Ltd. Under Indo-UK Aid Programme,

Rs. 4.97 crore for S&T work and Rs. 1.03 crore for

Management of Information Technology.

Budgetary Support

5.3.1 For the year 2005-06, there was an overall

provision of Rs.16398.82 crore: Rs.111.82 crore

under Plan and Rs.16287.00 crore under Non-

Plan [ In the Revised Estimate(RE) for 2005-06,

the total provision is Rs.17392.82 crore, Rs.105.00

crore under Plan and Rs.17287.82 crore under

Non-Plan]. For the year 2006-07 there is a net

provision of Rs.17385.89 crore, Rs. 98.81 crore

18 19

Chapter-6

Referral Price be fixed for existing gas based urea

units and also for DAP, and a Feedstock

however, deferred initially for a period of six

months w.e.f. 1.4.2004 i.e., up to Kharif 2004,

units; fuel oil / low sulphur heavy stock (FO/LSHS)

based units; and mixed energy based units. The

return on networth) and the statutorily notified sale

price was paid as subsidy to each urea-producing

20 21


Measures of Support for Fertilizers

Differential Cost Reimbursement (FDCR) be given

for a period of five years for non-gas based urea

units.

6.2.3 The Expenditure Reforms Commission (ERC),

headed by Shri K.P. Geethakrishnan, had also

mixed energy based group includes such gas

based units that use alternative feedstock / fuel to

the extent of more than 25% as admissible on

1.4.2002.

6.2.6 Under NPS, escalation / de-escalation, over the

6.1.1 For sustained agricultural growth and, with this end

in view, to promote balanced nutrient application, it

is imperative that fertilizers are made available to

farmers at affordable prices. With this objective,

Urea is presently the only controlled fertilizer, and

is sold at a statutorily notified uniform sale price,

and decontrolled phosphatic and potassic

fertilizers are sold at indicative maximum retail

prices (MRPs). The problems faced by the

manufacturers in earning a reasonable return on

their investment with reference to controlled

prices, are mitigated by providing support under

the New Pricing Scheme (NPS) for urea units and

the Concession Scheme for decontrolled

phosphatic and potassic fertilizers. The statutorily

notified sale price and indicative MRP is

considerably lower than the assessed cost of

production of the respective manufacturing units.

The difference between the cost of production and

the selling price/MRP is paid as subsidy /

concession to manufacturers. As the consumer

prices of both indigenous and imported fertilizers

are fixed uniformly, financial support is also given

on imported urea and decontrolled phosphatic and

potassic fertilizers.

Measures of Support for Urea

6.2.1 Until 31.3.2003, the subsidy to urea manufacturers

was being regulated in terms of the provisions of

the erstwhile Retention Price Scheme (RPS).

Under RPS, the difference between retention price

(cost of production of each individual unit as

assessed by the Government plus 12% post tax

unit. Retention price used to be determined unit-

wise, depending upon the technology, feedstock

used, the level of capacity utilization, energy

consumption, distance from the source of

feedstock / raw materials, etc. Though the RPS

did achieve its objective of increasing investment

in the fertilizer industry, and thereby creating new

capacities and enhanced fertilizer production,

resulting in a substantial increase in the use of

chemical fertilizers, the scheme had been

criticized for being cost plus in nature and,

therefore, not providing incentives for encouraging

efficiency.

6.2.2 Given the importance of fertilizer pricing, which has

direct implications with reference to the growth and

development of agriculture and sustainability of the

fertilizer industry, on the one hand, and the

quantum of subsidy outgo, on the other, the need

for streamlining the subsidy scheme in respect of

urea producing units had been felt for a long time.

A High Powered Fertilizer Pricing Policy Review

Committee (HPC) was constituted, under the

chairmanship of Prof. C.H. Hanumantha Rao, to

review the existing system of subsidization of urea,

suggest an alternative broad-based, scientific and

transparent methodology, and recommend

measures for greater cohesiveness in the policies

applicable to different segments of the industry.

The HPC, in its report submitted to the

Government on 3rd April,1998, inter-alia,

recommended that unit-wise RPS for urea may be

discontinued and, instead, a uniform Normative

examined the issue of rationalizing fertilizer

subsidies. In its report submitted on 20th

September, 2000, the ERC recommended, inter-

alia, dismantling of existing RPS and introduction

of a Concession Scheme for urea units based on

feedstock used and the vintage of plants.

6.2.4 The recommendations of ERC were examined in

consultation with the concerned Ministries /

Departments. The views of the fertilizer industry

and the State Governments / Union territories, and

economists/research institutes were also

obtained. After due examination of all these views,

a New Pricing Scheme (NPS) for urea units to

replace the RPS was formulated and notified on

30.1.2003. The new scheme took effect from

1.4.2003. It aims inter alia to encourage the urea

units to achieve internationally competitive levels

of efficiency, besides bringing in greater

transparency and simplification in subsidy

administration.

6.2.5 The NPS is being implemented in stages. Stage-I

was of one year duration, from 1.4.2003 to

31.3.2004. Stage-II commenced from 1.4.2004 for

a two years' duration, from 1.4.2004 to 31.3.2006.

The modalities of subsequent stages were to be

decided after review of implementation of Stage-I

and Stage-II. Under NPS, the existing urea units

have been divided into six groups based on vintage

and feedstock for determining the group based

concession. These groups are : Pre-1992 gas

based units; post-1992 gas based units; pre-1992

naphtha based units; post-1992 naphtha based

group base price, is given in respect of variable

costs related to changes in the price of feedstock,

fuel, purchased power and water. Under the

scheme, no reimbursement is allowed in respect of

investments made by a unit for improvement in its

operations nor are the gains as a result of

operational efficiencies to be mopped up.

6.2.7 It was also provided under the scheme that the

concession rates during Stage-II shall be adjusted

for reduction in capital related charges and

enforcement of efficient energy norms. Keeping

this in view, pre-set energy norms for different

groups / units were assessed and notified in Stage-

II of NPS. Reduction in rates of concession during

Stage-II of NPS for urea units on account of

reduction in capital related charges have also been

notified and intimated to the urea units.

Phased Decontrol of Urea Distribution

6.3.1 As per the NPS, it was also envisaged that

decontrol of urea distribution / movement will be

carried out in a phased manner. During Stage-I,

i.e., the allocation of urea under the Essential

Commodities Act 1955 (ECA) was restricted up to

75% of the installed capacity during Kharif and

50% during Rabi of 2003-04. It was further

envisaged that during Stage-II commencing from

1.4.2004, urea distribution will be totally

decontrolled after evaluation of Stage-I in

consultation with and concurrence of the Ministry

of Agriculture.

6.3.2 The total decontrol of urea distribution was,

22 23


which has been subsequently deferred up to Rabi

2005-06 i.e., up to 31.3.2006. Therefore, the

allocations of urea under ECA continue to be

restricted upto 50% of the installed capacity (as re-

assessed) of each unit and the remaining

quantities can be sold by the manufacturer

anywhere at the MRP.

Constitution of a Working Group For Formulation of Policy For Urea Units For Stage-III Commencing From 1.4.2006

6.4.1 For reviewing the effectiveness of Stage-I and II of

NPS, and for formulating a policy for urea units

beyond Stage-II i.e. from 1.4.2006 onwards, the

Department of Fertilizers constituted a Working

Group under the chairmanship of Dr. Y.K. Alagh on

10.12.2004. The Working Group was asked to

examine issues pertaining to formulation of policy

especially with regard to nature, pricing and

availability, demand and supply of urea upto the

end of 11th Five Year Plan, fixing milestones for

conversion of existing naphtha and FO/LSHS

based units to NG/LNG, feedstock policy, mode of

determination and methodology of payment of

concession to urea units, de-control of movement

and distribution of urea, balanced fertilization

through urea pricing etc. The Working Group has

since submitted its recommendations, which are

under examination in the Department.

Expenditure on Urea Subsidy

6.5.1 The financial support to indigenous and imported

urea from the year 1995-96 onwards is indicated

below : -

( Rs in crores)

6.5.2 The steady increase in fertilizer subsidies over the

years has largely been the result of increasing

production / consumption and increases in the

costs of inputs of indigenous fertilizers and prices

of imported fertilizers from time to time. The cost

of various inputs / utilities, such as coal, gas,

naphtha, rock phosphate, sulphur, ammonia,

phosphoric acid, electricity, etc., as also the cost of

transportation, has increased significantly over

the years. The gas-based fertilizer units

commissioned during this period also involved

higher capital investment per tonne of installed

capacity, necessitating constant upward revision

in the retention prices. The selling prices of

fertilizers to the farmers, however, remained

almost at the same level between July, 1981 and

July 1991. The Government effected an increase

of 30% in the issue prices of fertilizers in August

1991 after a gap of a decade. The selling price of

urea, which was reduced by 10% in August 1992,

was revised upwards by 20% in June 1994

followed by another increase by 10% with effect

from 21.2.97. The prices of urea were again

revised in February 2002 by Rs. 230 PMT and by

Rs. 240 PMT w.e.f. 28.2.2003. The price increase

made effective from 28.2.2003 was, however,

withdrawn w.e.f. 12.3.2003. The current price is

Rs. 4830 per tonne. However, the changes

effected in the prices of urea over the past two

decades have not materially altered the position in

terms of the absolute outgo in the form of subsidy,

because of the steady growth in production to

meet the growing demand and rise in the costs of

inputs. The relative levels of MRPs and the prices

of various feedstocks between 1981 and 2005 are

indicated below:

Increase in price of feedstocks vis-à-vis MRP of Urea

Note: 1. Figures in brackets indicate index with 1981-82 as the base.

2. Price of naphtha/FO during 1981-82 is Ex-storage point while 2004-05 prices are delivered prices. 3. There was no HBJ pipeline in 1981-82. The index of current prices along HBJ is with reference to the price

paid by the plants at landfall point in 1981-82.

nutrient application. In order to cushion the fertilizers with effect from 1.4.2002 and, based on has suggested a methodology for working out

impact of increase in prices of these fertilizers, the the same, the complex manufacturers have been concession rates for indigenous DAP based on

Ministry of Agriculture introduced a scheme of

divided in two groups. The base and the final

prices of imported DAP. The report is under

concession on sale of decontrolled fertilizers. In a quarterly rates for both the groups of the complex examination of the Department of Fertilizers.

major policy initiative taken by the Government on fertilizers are being calculated and announced 6.6.6 As regards SSP, the Department of Fertilizers

5.7.1996, the scale and coverage of the scheme

was substantially increased to give impetus to the

6.6.4

separately w.e.f. 1.4.2002.

Based on the recommendation of the Tariff

pays an ad-hoc concession. The MRP of SSP is

fixed by State Governments and varies from State

stagnating demand for these fertilizers and to

ameliorate the nutrient imbalance in the soil,

which is essential for sustaining the desired

growth in agricultural productivity. Again in 1997-

98, the concession on these fertilizers was

increased w.e.f. 1.4.97 vis-à-vis the uniform

6.6.5

Commission (TC) and the Inter Ministerial Group

(IMG) Government has implemented a revised

methodology of working out concession rates for

DAP (indigenous & imported) and MOP w.e.f.

1.4.2003.

The country is almost fully dependent on imported

to State. This ad-hoc dispensation and the low

rates of concession, coupled with the progressive

increases in the input cost, not only led to a sharp

decrease in SSP consumption, which is often

referred to as the “poor farmers' fertilizer,” but also

had a serious adverse impact on the SSP industry.

indicative maximum retail prices (MRPs) for these raw material / intermediates (i.e. rock phosphate, Keeping this in view, it was decided to increase the

fertilizers except Single Super Phosphate (SSP). sulphur and phosphoric acid) for the production of ad-hoc concession rate of SSP from Rs. 650/- to

Planning Commission was set up to examine the

Concession Scheme for Decontrolled

Fertilizers

6.6.1 Phosphatic and Potassic fertilizers were

decontrolled w.e.f. 25.8.1992. Consequent upon

this, the prices of these fertilizers registered a

sharp increase vis-à-vis the price of urea, and also

led to imbalance in fertilizer usage in terms

of the preceding quarter and the average

exchange rate of the current quarter.

6.6.3 The concession rates for complex fertilizers were

derived from the concession rates of indigenous

DAP and MOP till 31.3.2002. However, the

Government accepted the recommendations of

Tariff Commission's cost price study on complex

alternative methodology of pricing, linking the

price of phosphoric acid with the international

price of DAP. An Expert Group under the

chairmanship of Prof. Abhijit Sen, Member,

issues related to pricing of phosphatic fertilizers.

The Expert Group has submitted the report and

1.7.2005 announced by this Department are as

under:

(In Rs./MT)

6.6.8 The actual expenditure under the concession

scheme was Rs. 3326.00 crores during the year

2003-04 and Rs. 5142.18 crores during 2004-05.

The budget estimate (BE) for the year 2005-06 is

Rs. 5200 crore. The amount of concession

disbursed on sale of decontrolled P&K fertilizers

since 1992-93 is given below:

These measures were calculated to induce the

farmers to optimize the balanced use of the three

major plant nutrients.

6.6.2 The Department of Fertilizers is administering the

concession scheme for extending financial

support to decontrolled P&K fertilizers on sales

w.e.f. 1.10.2000. Under the concession scheme,

base rates of concession are announced annually

after the approval of Government. The final

concession rates, except for SSP, are calculated

and announced quarterly after taking into account

the average price of raw material & intermediates

24

phosphatic fertilizers in the country. The prices of

these commodities, both finished fertilizers and

intermediates, have shown a rising trend in the

international market during last two years. The

prices of finished fertilizers / fertilizer inputs

prevailing in the international market have a direct

bearing on the total subsidy outgo on phosphatic

and potassic fertilizers. In view of the difficulties

arising from the situation, both in terms of the

procurement and pricing of the raw materials /

intermediates and finished phosphate fertilizers, it

was considered necessary to work out an

Rs. 975/- PMT w.e.f. 1.9.2005. The State

Governments have also been requested to

maintain the present MRP of SSP in their States.

6.6.7 The base rates of concession for making "on

account" payment on the sales of decontrolled

P&K fertilizers during the year 2005-06 w.e.f.

25

Department of Fertilizers, Ministry of Chemicals & Fertilizers A n n u a l R e p o r t 2 0 0 5 - 2 0 0 6

availability of liquidity with the manufacturers / constitution of TAC is to put a curb on the sale of

26 27


Rationalizing and Streamlining of

Concession Scheme

6.7.1 Since 1992, Government of India is administering

Concession Scheme on decontrolled Phosphatic

& Potassic (P&K) fertilizers such as DAP, NPK,

MOP and SSP. The basic objective behind this

Scheme is to provide these fertilizers to the

farmers at affordable prices. For this purpose,

Department of Fertilizers fixes the indicative MRP

at which the manufacturers/importers are required

to sell decontrolled fertilizers in the market. The

normative cost of fertilizers is generally higher

than the MRP. The manufacturers/importers are

provided the difference between the normative

cost and MRP in the form of concession.

Accordingly, the benefit of subsidy on fertilizers is

passed on to the farmers by making them

available at the subsidized selling price. This

Scheme was implemented by Department of

Agriculture & Cooperation upto September 2000,

and was subsequently transferred to Department

of Fertilizers in October, 2000. After the transfer of

the Scheme, Department of Fertilizers framed

fresh guidelines on the Concession Scheme. At

present, the guidelines dated 5.8.2002 are in

vogue. Under the Scheme, the 'on account'

payment of 85% of the concession is released to

the manufacturers / importers on submission of

details of sales in the prescribed Proforma. The

balance payment of concession is released to the

manufacturers after the State Governments

certify the sales. The idea behind releasing 'on

account' payment of concession is to ensure the

importers in the event of delay in the certification of

sales. The role and responsibilities of the State

Governments in certification of sales have been

clearly defined laying down the time frame for the

same. Under the guidelines, the fertilizer

quantities as per the sales made by the

manufacturers/importers to the dealers registered

under Fertilizer Control Order (FCO), Government

agencies and NPK mixture manufacturers, are

eligible for concession. In order to facilitate the

manufacturers to make the fertilizers available far

and wide, the Department has been permitting

marketing arrangements, on case to case basis,

whereby the manufacturers could use each

other's dealers' network. The quality of the

fertilizers is ensured under the provisions of the

FCO.

6.7.2 In addition to provisions under FCO, to ensure

supply of quality fertilizers, especially standard

SSP, a Technical Audit & Inspection Cell (TAC),

under the aegis of Projects & Development India

Ltd. (PDIL), has also been constituted. The TAC

was assigned the task of examining various

grades of Rock Phosphate (both indigenous and

imported) and recommend the grades of Rock

Phosphate with source of origin, alongwith

technical parameters such as consumption norms

for each grade, for manufacture of SSP as per

FCO specifications. The TAC was also mandated

to conduct six-monthly techno-commercial audit

of SSP plants and to confirm as to whether the

SSP units are using the specified/notified grades

of Rock Phosphate. The objective behind the

non-standard SSP to the farmers and to cross-

check the concession claimed by the industry.

6.7.3 In the wake of shortage of Rock Phosphate of the

specified/notified grades, Department of

Fertilizers issued fresh guidelines on 10.8.2005,

whereby the grades/sources of Rock Phosphate

were liberalized and the SSP industry was

informed as to how to take benefit of the same. In

order to ensure smooth availability of decontrolled

fertilizers, Department is also permitting the sale

through marketing arrangements. The benefit of

concession under the Concession Scheme has

also been extended on sale of P&K fertilizers to

NPK mixture manufacturers registered under the

31.3.2005 was 863.06 crore. incur a loss of Rs.1300 crore with an interest the BIFR. of operations, the Government decided to close

28 29


Chapter-7

Public Sector Undertakings and Cooperative Societies

down FCI in September 2002. Consequently, a FCO.

component on GOI loan at Rs.1290 crore and 0.32

crore towards depreciation.

Hindustan Fertilizer Corporation Limited

Operating Performance

7.3.4 Due to closure, the operational activities of the

Company have been suspended due to Closure

declared by Government of India. During the year 7.1.1 There are 10 public enterprises and one multi-state

cooperative society namely Krishak Bharati

Cooperative Limited (KRIBHCO) under the

administrative control of the Department.

The Fertilizer Corporation of India Limited

Introduction

7.2.1 Incorporated on 1st January, 1961, FCI was re-

organized along with National Fertilizers Ltd. (NFL)

with effect from 1.4.1978 into five companies

namely, FCI, NFL, Hindustan Fertilizer Corporation

Ltd.(HFC), Rashtriya Chemicals & Fertilizers Ltd.

(RCF) and Projects & Development India Ltd.

(PDIL). Following re-organisation FCI comprised

four units located at Sindri (Jharkhand), Gorakhpur

(Uttar Pradesh), Ramagundam (Andhra Pradesh)

and Talcher (Orissa), with a total annual capacity of

5.87 lakh MT of nitrogen beside an abandoned

project at Korba (Chhattisgarh). As on 31.3.2005,

FCI had an authorized share capital of Rs.800

crore and paid up share capital of Rs. 750.92 crore.

Reference to BIFR

7.2.2 The Corporation was declared sick in November,

1992 by the Board for Industrial and Financial

Reconstruction (BIFR), and on 2.11.2001 the BIFR

ordered winding up the FCI in terms of Section

20(1) of the Sick Industrial Companies (Special

Provisions) Act, 1985. The Appellate Authority for

Industrial and Financial Reconstruction (AAIFR)

on 9.4.2002 upheld BIFR's order dated 2.11.2001.

Closure of the Company

7.2.3 In view of the continuing losses of the Company,

stemming from technical and financial non-viability

Voluntary Separation Scheme (VSS) was offered

to all its 5712 employees. All the employees, who

opted for VSS have since been released, except

60 employees who are engaged in discharging

statutory obligations including safety and security

of properties / assets of the various units of the

Company.

7.2.4 However, on appeals filed by the Government and

the Company against the orders of AAIFR and

BIFR for winding up of FCI, the High Court of Delhi

on 26.11.2002 directed the BIFR to reconsider their

order dated 2.11.2001 to the extent of hiving off the

Jodhpur Mining Organisation for forming a new

company and revival of other units if any proposals

are received within a reasonable time. BIFR in their

meeting held on 2.4.2004 sanctioned the scheme

of arrangement of de-merger between FCI and

FAGMIL with effect from 1.4.2003 and confirmed

their prima facie opinion regarding winding up of

the company. BIFR vide their orders dated

17.5.2004 conveyed their opinion to High Court of

Delhi. Further directions of the Delhi High Court are

awaited.

Production / Sales Performance

7.2.5 In view of the decision for closure of the

Corporation, there was no production during the

year.

Financial Results

7.2.6 During the year 2004-2005 the company incurred a

net loss of Rs.1209.10 crore which includes

Rs.1203.40 crore as interest on GOI loan and

Rs.0.32 crore towards depreciation. During the

year 2005- 2006 , the company is expected to

Introduction

7.3.1 The Hindustan Fertilizer Corporation Limited

(HFC) was incorporated on 14th March, 1978 as a

result of the reorganization of the Fertilizer

Corporation of India Limited (FCI), and comprised

Barauni, Bihar, Durgapur and Haldia, West Bengal

and Namrup. As on 31st March 2005, HFC had an

authorized capital of Rs. 1200 crore and a paid up

capital of Rs. 686.54 crores.

Closure of the Company

7.3.2 The Company was declared sick by BIFR. in

November 1992. Subsequently, the Government

decided to close the Company on account of

techno-economic non-viability. Almost all

employees have opted for Voluntary Separation

Scheme (VSS) and as on 31.12.2005, only 52

employees are on the roll of the company to carry

out post-closure activities.

BIFR Status

7.3.3 During the course of proceedings before BIFR, the

Namrup units of the Company were demerged with

effect from 1.4.2002 and the residual Company

comprising three units at Barauni, Durgapur and

Haldia and the Fertilizer Promotion & Agricultural

Research Division (FP & ARD) was ordered to be

closed. The AAIFR through its order on 26.4.2002

has permitted hiving off the Namrup units of HFC

into a new company under the name of

“Brahmaputra Valley Fertilizer Corporation

Limited” w.e.f. 1.4.2002 and remitted back the

matter to BIFR for reconsideration of its decision

regarding revival of Durgapur, Barauni units and

the Research Division. The case is pending before

2004-05, HFC has incurred a Net loss of Rs.

878.00 crore and during 2005-2006, the company

has projected a loss of Rs. 968.49 crore.

Pyrites, Phosphates & Chemicals Ltd.

Introduction

7.4.1 Pyrites, Phosphates & Chemicals Ltd. (PPCL) was

set up in 1960. It was entrusted the responsibility of

exploiting the country's pyrites deposits. The

company had three production units located at

Amjhore (Bihar), Dehradun (Uttaranchal) and

Saladipura (Rajasthan). The company was also

engaged in trading of indigenous fertilizers. As

against the authorized capital of Rs. 100 crore, the

paid up capital of the company was Rs. 95.40 crore

as on 31.3.2005.

7.4.2 The Government approved closure and hiving off

of the Dehradun and Saladipura units in July, 2002

and the Amjhore unit including all other

establishments in June 2003, implementation of

the Voluntary Separation Scheme (VSS) for its

employees, and disposal of the assets as per due

procedure. Accordingly, the company has relieved

1205 employees till January 2006 retaining 12

employees for all the three units, the Registered

Office and the Corporate Office. The company has

so far spent Rs. 63.05 crore on implementation of

VSS from the funds provided by the Government

for the purpose.

7.4.3 The company's winding up decision is pending

before the Patna High Court.

7.4.4 The loss for 2005-06 is projected at Rs. 140.00

crore. The accumulated loss of the company as on

30 31


Revival of Closed Units of FCI, HFC, and PPCL

7.5.1 In the light of the Common Minimum Programme of

the UPA Government, the possibilities for revival of

the closed Fertilizer Public Sector Undertakings

(PSUs)/Units based on market demand and their

techno-economic viability was entrusted to

Projects & Development India Limited (PDIL) in

respect of FCI and HFC. After examining the

reports of PDIL, FCI has submitted revival

proposals in respect of its Gorakhpur and Sindri

Units by setting up gas-based “Brownfield

Fertilizer Plants” at the existing sites. In the case of

Ramagundam and Talcher units also, revival

proposals have been received both from the public

sector and private sector companies. In order to

examine these proposals and to arrive at a final

decision, some more time has been sought from

the Hon'ble High Court of Delhi.

7.5.2 Similarly, after examining the reports of PDIL, HFC

7.5.3 In the case of PPCL, the possibility of revival of the

Amjhore unit for the purposes of mining and selling

of pyrites for direct use as fertilizer is under

consideration of the Government.

Rashtriya Chemicals and Fertilizers Limited (RCF)

Introduction

7.6.1 Rashtriya Chemicals and Fertilizers Limited (RCF)

was incorporated as a separate company on 6th

March 1978 as a result of reorganization of the

erstwhile Fertilizer Corporation of India Limited. At

the time of its formation, the company had only one

operating unit at Trombay (near Mumbai) and two

major projects under implementation viz, Trombay

IV and Trombay-V expansion. The gas based Thal-

Vaishet fertilizer complex about 100 Kms from

Trombay, was also later implemented by RCF and

it commenced commercial production on June 1,

1985. As on 31st March 2005, the company had

Hon'ble Union Minister of Chemicals & Fertilizers and Steel, Sh. Ram Vilas Paswan, visits control room of RCF, Thal

During April-October 2005, RCF produced 5.10

has submitted revival proposals in respect of its

Barauni and Durgapur Units by setting up gas

based “Brownfield Fertilizer Plants” at existing

sites. In the case of Haldia Unit, Shriram

Engineering Project Construction has submitted a

revival proposal for setting a coke oven project

including manufacture of fertilizers. The above

status was placed before the BIFR in its hearing

held on 29.11.2005 and the BIFR has given some

more time for finalizing the revival plan by the

promoters(Government)/Company, which is under

examination. Government's decision to consider

revival of closed units of HFC was intimated to

AAIFR, which referred back the matter to BIFR.

The Board has been informed that a proposal to

revive Durgapur and Barauni units as gas based

“Brownfield Project” is under examination. Further

action on the revival will be taken as and when

availability of gas is crystallized.

an authorized share capital of Rs. 800 Crore and a

subscribed and paid up capital of Rs. 551.69

Crore.

Production Performance

7.6.2 The annual installed capacity of all the units of RCF

is about 10.57 lakh MT of nitrogen and 1.20 lakh

MT of phosphate in terms of fertilizer nutrients.

The production during 2004-05 was 9.22 lakh

tonnes of nitrogen and 0.98 lakh tonnes of

phosphate. Production during the year was

severely affected due to feedstock/natural gas

short supply.

Besides fertilizers, the company also produces a

number of industrial products such as Methanol,

C o n c e n t r a t e d N i t r i c A c i d , M e t h y l a m i n e s ,

Ammonium Bicarbonate, Sodium Nitrate, Sodium

Nitrite, Dimethyl Formamide, Dimethyl Acetamide,

Ammonium Nitrate, Argon, etc.

lakh tonnes of industrial nitrogen as against 5.49

lakh tonnes during the corresponding period of the

previous year and 0.54 lakh MT of phosphate as

against the production of 0.56 lakh tonnes in the

corresponding period of the previous year. During

the year 2005-06, the fertilizer nutrient production

is projected at 9.12 lakh MT of nitrogen and 1.03

lakh MT of phosphate. Capacity utilization during

the present year has been affected due to flooding

caused by heavy rains followed by severe gas cut

due to fire in the ONGC Platform in July 2005.

Sales Performance

7.6.3 The sale of fertilizers (including bought-out

products) during the year 2004-05 was of the order

of 25.37 lakh tonnes, which corresponds to 9.31

lakh tonnes of nitrogen and 1.05 lakh tonnes of

phosphate.

During the period April-October 2005, RCF sold

5.17 lakh tonnes of nitrogen and 0.60 lakh tonnes

of phosphate as against 5.34 lakh tonnes of

nitrogen and 0.64 lakh tonnes of phosphate for the

corresponding period last year.

The Company also produces and sells bio-

fertilizers, micronutrients, and 100% solid soluble

fertilizers.

The sales turnover of industrial products division of

the Company was Rs. 444 crore for the year 2004-

05. During the current year sales of industrial

products division till October 2005 was Rs. 222

crore.

The Company continued with its Fertilizers

Promotion Programmes to educate the farmers in

the scientific and balanced use of fertilizers. RCF

has two Farmer Training Institutes, one at Nagpur

and other at Thal to impart training to farmers and

farm labourers in integrated development and new

farming techniques, etc.

32 33


Hon'ble Union Minister of Chemicals & Fertilizers and Steel, Sh. Ram Vilas Paswan, alongwith CMD, RCF attending Kissan Mela in Maharashtra

Grievance Redressal

7.6.7 The Company has established a grievance

redressal system with complaints/suggestion

boxes placed at convenient locations in the Area

Offices/ Administrative Building at Trombay and

Thal. Any aggrieved customer/dealer or other

citizen can approach the Company for any failure

of the quality/price charged/conduct of any

officer/employee to a special officer of the

Company not below the rank of General Manager

who will act as the Nodal Officer for redressal. The

name, address and telephone No. of the officer is

available on Company's website www.rcfltd.com.

It is assured that the Nodal Officer will immediately

take up the issue with the concerned department

and appropriate action will be taken within seven

days from the date of receipt of the complaint or an

appropriate reply is sent within seven days as the

case may warrant.

A similar grievance address and redressal

system/procedure is followed by the Company in

material during peak seasons and preference in

supplies of fast moving material, etc. RCF had also

launched special drive for recruitment of only

SC/ST dealers during the year 2004-05.

Welfare of Minorities

7.6.10 RCF as a policy includes a representative of the

minorities in the recruitment selection boards to

ensure that the minorities get their rightful share in

the services and benefit of developments.

National Fertilizers Limited (NFL)

Introduction

7.7.1 N a t i o n a l F e r t i l i z e r s L i m i t e d ( N F L ) w a s

incorporated on 23rd August, 1974 for setting up

two nitrogenous plants, at Bathinda (Punjab) and

Panipat (Haryana) with LSHS as feedstock, each

having Urea production capacity of 5.11 lakh MT

per annum. Consequent upon the reorganization

of the FCI, the Nangal Unit (including Nangal

Expansion Project) of FCI was also transferred to

Financial Results

7.6.4 During the year 2004-05, the Company reported a

net profit (after tax) of Rs. 140.96 Crore.

During the period April-October 2005, the

Company has made a net profit after tax of

Rs. 52.73 Crore.

Disinvestment

7.6.5 Government of India disinvested about 5.64

percent of the equity Share Capital of the Company

during 1991-92. Further disinvestment of about

1.57 percent and about 0.27 percent was effected

during October 1992 and December 1994

respectively. Thus, the total disinvestment has

been of the order of 7.48 percent of the equity.

Modernisation / Expansion Schemes

7.6.6 Ammonia-V plant at Trombay, commissioned in

1981, is being technologically upgraded at an

estimated cost of Rs. 249 Crore, to reduce energy

consumption.

Concentrated Nitric Acid Plant at Trombay is being

modernized at an estimated cost of Rs. 14 Crore to

improve the longevity of plant.

An Argon plant is being set up at Thal to recover

argon from purge gas of the ammonia plant. The

project is estimated to cost Rs. 94 Crore.

RCF envisages an expansion project at Thal (Thal-

III Expansion) by setting up 1850 MTPD ammonia

plant and 3200 MTPD urea plant at an estimated

cost of Rs. 1841 Crore. The Techno-economic

Feasibility Report of the project has been

submitted to the Government and is under

examination.

respect of issues related to staff also.

Employment of SC/ST, Ex-Service Men, Physically Handicapped Persons & Other Backward Classes

7.6.8 The guidelines regarding reservation in

Recruitment and Promotion for SC, ST, OBC, Ex-

Servicemen and Physically Handicapped Persons

are being followed.

Out of total strength of 4235 (as on 1st November,

2005), there are 550 SCs, 261 STs, 103 OBCs, 10

Ex-Servicemen and 22 Physically Handicapped

Persons in the Company.

Reservation in Dealership

7.6.9 The Company has been giving priority to SCs/STs

in the appointment of dealers and gives them

special treatment like no security deposit, supply of

NFL w.e.f. 1.4.1978.

A gas based ammonia and urea fertilizer project on

the HBJ pipeline at Vijaipur in Guna District of

Madhya Pradesh, with an annual installed capacity

of 7.26 lakh tonnes Urea commenced commercial

production on 1.7.1988. The urea capacity was

doubled from 7.26 lakh MT to 14.52 lakh MT per

annum on commissioning of its expansion unit on

31.3.1997. The production capacity of gas based

plants in the country has been re-assessed w.e.f.

1st April, 2000 resulting in capacity revision from

7.26 lakh tones to 8.64 lakh tones both for Vijaipur-I

and Vijaipur-II.

A revamp of urea plant at Nangal was successfully

completed three months ahead of schedule and

commercial production commenced w.e.f. 1st

Feb.2001. With this, the installed capacity of urea

at Nangal Unit increased from 3.30 lakh tonnes to

http://www.rcfltd.com/

Department of Fertilizers, Ministry of Chemicals & Fertilizers

biofertilizers with an installed capacity of 100 MT urea production. The CAN production at Nangal

per annum. unit has been stopped w.e.f. 1st April 05 due to its

The authorized capital of the company as on non-viability.

A n n u a l R e p o r t 2 0 0 5 - 2 0 0 6

31.

4.78 lakh tones per annum raising the company's

total installed capacity to 32.31 lakh MT of urea

corresponding to 14.86 lakh MT of 'N' (Nitrogen) in

terms of fertilizer nutrient.

The company also produces various industrial

products like nitric acid, ammonium nitrate, sodium

nitrite/nitrate, sulphur, methanol, liquid nitrogen,

liquid oxygen etc. besides bio-fertilizers. The

company commissioned an argon gas plant

designed to produce 120 NM3/hr. of argon gas at

the Panipat Unit in October 1997. A methanol

Augmentation Scheme at Nangal Unit was

commissioned in October 1998 thereby enhancing

the daily production capacity of Methanol from 50

tonnes to 67 tonnes. The company's biofertilizers

plant at Indore produces three strains of

31.3.2005 stood at Rs.500 crore and the paid up

c a p i t a l a t R s . 4 9 0 . 5 8 c r o r e , c o m p r i s i n g

Government of India's share of Rs.479 crore

(97.64%) and the remaining Rs.11.58 crore

(2.36%) held by financial institutions and others.


7.7.2 During the year 2004-05, the company produced

34.32 lakh MT of urea, 0.14 lakh MT of Calcium

Ammonium Nitrate (CAN) and 13,151 tonnes of

industrial Nitrogen ('N'). Production of urea during

2004-05 at 106.2% capacity utilization is the best

ever achieved by the company, with all the plants

recording more than 100% capacity utilization.

Upto October 2005, the company has produced

20.65 lakh MT of urea thereby achieving a capacity

utilization of 109.6% (pro-rata basis) in respect of

Marketing

7.7.3 During 2004-05 the company sold 34.73 lakh MT of

urea, which is the best ever sale recorded by the

company. The company also made record

dispatches of 35.24 lakh MT of urea during the year

2004-05. The sale of urea during April 05 - Sept. 05

i.e. Kharif season was 17.80 lakh MT, which is also

the highest ever sales for any corresponding

season so far.

NFL is also producing and marketing Neem

Coated Urea which is in good demand. All NFL

plants have started production of Neem coated

urea. NFL is the 1st company in the Fertilizer

Industry to develop, produce & successfully

market Neem coated Urea. The company has also

initiated action for the development & production of

Zinc coated & Sulphur coated urea.

Financial Performance

7.7.4 During the year 2004-05, the company recorded a

post-tax profit of Rs.160.91 crores, and disbursed

a dividend of Rs.48.27 crore which is 9.84% of the

paid up capital.

For the period April-October 2005 the company

have made a post-tax profit of Rs.70.28 crores.

MoU

7.7.5 NFL received 'Excellent' rating under MoU system

for the year 2003-04, and for 2004-05 on the basis

of provisional data.

Employment of SC/ST, Ex-Servicemen and Physically Handicapped Persons as on 31.10.2005

7.7.6 The details in this respect are given in the following

table:

Public/Staff Grievance Redressal Machinery

7.7.7 Based on the model grievance procedure notified

by DPE, the company has framed a 'Grievance

Redressal Procedure' for staff and officers of NFL.

The objective of the 'Grievance Redressal

Procedure' is to provide easily accessible

machinery for expeditious settlement of

grievances of staff and officers with the aim of

providing satisfaction and in improved productivity

and job efficiency of the organization.

For systematic monitoring and supervision of

Public Grievances, Head of Corporate HR

Department has been nominated as Director

(Grievance) as per the directives of the

Government. In addition to this in-built system, the

company has also set up “Public Grievances

Centres” at the Units, whose working is supervised

by respective Heads of the Unit/Marketing Division

with the help of the Grievances Redressal

Mechanism.


7.7.8 Appointment of Dealers is governed by NFL's

Marketing Manual and reservations for SC/ST, Ex-

serviceman, Physically handicapped etc. are

governed by guidelines issued by Deptt. of

Fertilizers, Ministry of Chemicals & Fertilizers.

Projects & Development India Limited

Introduction

7.8.1 Projects & Development India Limited (PDIL) was

registered as a separate company in March 1978

after hiving off from FCI. The company has its

registered office at Noida, Uttar Pradesh. The

authorized share capital of the company is Rs.60

crores and paid up capital is Rs.55.27 crores as on

3.2005.

34 Hon'ble Union Minister of Chemicals & Fertilizers and Steel, Sh. Ram Vilas Paswan, with CMD and officials & staff of NFL

35


Bull

be

maj

Restructuring Scheme

7.8.2 The Government of India approved a Revival

Package for PDIL on 7.5.2003, which included

closure of E&C and R&D Division at Sindri, besides

various reliefs and concessions to make the

company viable on a long term basis. The Revival

Scheme was approved by BIFR on 26.3.04. The

Govt. of India has extended all the reliefs and

concessions envisaged in the approved revival

scheme, and the net worth of the company has

become positive. Major restructuring in terms of

manpower has also been done and 1188

employees have been released under VRS/VSS.

The regular manpower strength has come down to

449.

Operating Results

7.8.3 The Company has earned a net profit of Rs. 10.06

crore for the year 2004-05. During the period April

to November 2005, a profit of Rs 4.56 crore has

been earned. The estimated profit for the financial

year is Rs. 8.03 crore.

Engineering & Consultancy Division

7.8.4 The Company is mainly engaged in Design,

Engineering, Procurement, Inspection, Store

Management and Supervision during construction

and commissioning of fertilizer and chemical

plants. It has played a pivotal role in establishing

fertilizer plants in India from concept to

commissioning and through trouble shooting and

Non Destructive Testing (NDT) for health

maintenance of the plants.

During the year 2004-05, the following major

projects / assignments, in the fertilizer sector have

been executed/ under execution involving PDIL:

1. Energy Saving Scheme Phase I and Phase II for

Ammonia Plants of IFFCO viz. 1100 MTPD

Ammonia Plant at Kalol, 1520 MTPD Ammonia

36

Plant at Aonla-I and Aonla-II, 977 MTPD Ammonia

Plant at Phulpur I and 1520 MTPD Ammonia Plant

at Phulpur II.

2. Ammonia - Technology Upgradation project of

Rashtriya Chemicals & Fertilizer Limited for

providing Design, Engineering consultancy

services for Trombay V Ammonia Upgradation

Project.

3. Methyl Amine Expansion project for M/s RCF, Thal

(Design Engineering Consultancy and supervision

of construction and commissioning).

4. Revamp Project of ammonia, Urea and Offsite for

Namrup-II of Brahamputra Valley Fertilizers

Corporation Ltd. (BVFCL).

5. Consultancy services for Argon Recovery Plant

package for Hazira Fertilizer Complex of

KRIBHCO.

6. Techno Economic Feasibility Report and detailed

project reports for various clients in the Fertilizer

Sector.

Foreign Assignments

7.8.5 PDIL has proved its Engineering excellence and

contribution not only in Indian Fertilizer Industry but

also established its credentials in fertilizer and

diversified sectors abroad. The following

assignments have been completed / under

execution:

l The Design and Detailed Engineering activities for

2200 MTPD Ammonia Plant at Karatha in Australia

for M/s Burrup Fertilizers Pvt. Ltd. were completed

as per schedule. Site construction activity is

progressing. PDIL's Engineers from various

disciplines like Process, Mechanical, Civil,

Electrical etc. have been deputed to Karatha for

Quality Supervision.

l In association with M/s Sumatec Corporation PDIL

engineers from various disciplines were deputed to

Malaysia.

Jobs in Diversified Sectors

7.8.6 Some of the major jobs executed / being executed

by PDIL in different sectors are:

(i) Oil, Gas & Refinery

l Project Management Consultancy services to

Bharat Petroleum Corporation Limited for Lube Oil

Pipeline Project from BPCL Mumbai Refinery to

Wadilube Installation, and for ATF Pipeline from

Mumbai Refinery to Mumbai Airport.

l IOCL, Gujarat Refinery - Preparation of updated

“As Built” Piping & Instrumentation Diagrams &

Process Flow Diagram for Crude Units AU1 &

AU2, Hydrogen Unit 1 & Old Sulphur Recovery

Complex.

l Indian Oil Corporation Limited, Haldia Refinery -

Rendering engineering services for MSQ Project.

Supervision of shutdown and routine maintenance

jobs at HPCL-Mumbai is also being undertaken by

PDIL engineers.

l Pre-feasibility Report for LPG Import Terminal at

Tuticorin BPCL, Study for de-bottlenecking and

modernisation of Drinking water facility at Panipat

Refinery, IOCL , DFR, RRA, EIA Reports for H2S

Removal for Thal Line, GAIL (India) Limited.

(ii) Infrastructure Sector

The Company made a breakthrough in the

Infrastructure sector last year by receiving a major

job from Ministry of Defence for Project

Management Consultancy Services for their

Married Accommodation Project at various

locations viz. Guwahati, Kolkata, Chandigarh,

Pune, Delhi, Bangalore and Gwalior. In the current

year the company has secured another job of

Review Consultant for Married Accommodation

Projects at Allahabad, Jhansi, Bhopal, Shillong,

Kanpur, Bareilly, Mathura, Pithoragarh and

Shahjahanpur.

(iii) Power Sector

PDIL, has been awarded the job of Preparation of

DPR & Tender documents for Environment

Protection schemes at Anpara Thermal Power

Station, UP RAJYA VIDYUT UTPADAN NIGAM

LTD., ANPARA

It also got an assignment from Rajasthan Rajya

Vidyut Utpadan Nigam Limited (Kota Super

Thermal Power Station) for rendering consultancy

services for Cooling Tower, Cooling Water System

& Dry Fly Ash Handling System.

PDIL has also been in dialogue with M/s. SKODA

EXPORTS for providing engineering services for

the turnkey projects under execution / to be

executed by them.

(iv) Coal Sector

PDIL was retained by CMPDIL, Ranchi, for base

line data generation of 21 Projects of ECL in

Maharashtra & MP and for base line data

generation for Karo, Bermo, Konar and Topa OCP

of CCL.

SSP Audit

Deptt. of Fertilizers (DOF) has assigned the job of

Techno Commercial Audit of SSP plants, DAP

Plants and NPK Plants in India. The efforts put in

by PDIL on this assignment have been well

appreciated. Under this programme, periodical

technical audits are being carried on a regular

basis.

Inspection & NDT

The company has also established its credentials

for Third Party Inspection (TPI) and Non-

Destructive Testing (NDT) services. Statutory

Inspection and Testing of LPG Spheres, Mounded

ets, ammonia Storage Tanks etc continued to

the specialized activities of PDIL. Some of the

or jobs executed in this field are:

37

l Inspection order from IOCL for 690 Km Chennai-

Trichy-Madurai Pipeline Project.

l I n s p e c t i o n & e x p e d i t i n g s e r v i c e s f o r

Snamprogetti, Italy for indigenous supplies for

ARAMCO Projects, Inspection & expediting

services for Snamprogetti, Italy for indigenous

supplies for OMIFCO Project and TPI rate contract

of bought out items from BHEL, IOCL, Digboi,

Haldia and PHED, Rajasthan.

l Inspection & NDT for repair and modification of

20,000 MT Ammonia storage tank at M/s OCFL,

Paradeep, and inspection & certification of

Ammonia Storage tank at Kandla for IFFCO.

l IOCL also awarded a number of inspection jobs to

PDIL including inspection of many Petroleum

Storage Tanks at various locations.

Catalyst Division

7.8.7 Production of main catalysts i.e. High Temperature

CO Shift Conversion, Low Temperature CO Shift

Conversion and Vanadium Pentoxide Sulphuric

Acid during the year under review, was 362 MT

compared to 982 MT during the previous year.

During 2005-06 upto November, 2005 PDIL has

produced 40 MT of various types of Catalysts and

has targeted production upto 233 MT of Catalysts

during the entire year 2005-06. The production has

been constrained by lack of demand.

Efforts are being made to generate demand and

get orders. During the year, PDIL executed orders

from various companies, including, RCF,

KRIBHCO, IFFCO, SAIL, and a number of private

companies.

Facilities to SC/ST/OBC Employees

7.8.8 In line with Government Guidelines, PDIL

continued to extend a number of facilities to

SC/ST/OBC employees. A Liaison Committee is

functioning to protect and safeguard the interests

38

of SC/ST employees in the matter of promotion and

for SC/ST/OBC in the matter of recruitment

although there are inherent limitations in view of

the background of restructuring, VSS, etc.

The manpower position as on 31.3.05 including the

representation of SC/ ST & OBC is as follows:-

The Fertilisers And Chemicals Travancore Limited (FACT)

Introduction

7.9.1 The Fertilisers And Chemicals Travancore Limited

(FACT) was incorporated in 1943. In 1947 FACT

started production of Ammonium Sulphate with an

installed capacity of 50,000 MT per annum at

Udyogamandal, near Cochin. In the year 1960,

FACT became a PSU and towards the end of 1962,

Government of India became the major

shareholder.

From a modest beginning, FACT has grown and

diversified into a multi-division/multi-functional

Organisation involved in the manufacture and

marketing of Fertilisers and Petrochemicals,

Engineering Consultancy and Design and

Fabrication and Erection of Industrial Equipments.

The products manufactured by the Company

include: Factamfos (a 20:20:0 complex fertilizer),

Ammonium Sulphate, Urea, Caprolactam, Soda

Ash and Nitric Acid. However, the production of

urea has been suspended since March 2003.


7.9.2 Udyogamandal Division: During the year 2004-05

Udyogamandal Division produced 104388 MT of

Factamfos as against a target of 195000 MT,

200564 MT of Ammonium Sulphate as against

target of 227911 MT. The production of Factamfos

and Ammonium Sulphate up to November 2005 is

79808 MT and 124964 MT, respectively, as against

71960 MT and 123330 MT, respectively, during the

corresponding period in the previous year.

Petrochemical Division: The production of

Caprolactam for the year 2004-05 was 44932 MT

as against 41794 MT during the year 2003-04. The

reasons for low production of Caprolactam during

the financial year 2004-05 were shortage of raw

material and Oleum shortage due to problems

faced in DCDA acid plant in Udyogamandal and

leaks in a few heat exchangers.


Sh. Ram Vilas Paswan, being received at Udyogamandal

FACT, Cochin

Production of Caprolactam for the year 2005-06 up

to November 2005 is 27664 MT as against 27338

MT during the corresponding period in the previous

year.

Cochin Division: The production of Factamfos was

456400 MT in 2004-05 as against 426625 MT

during the year 2003-04. Production of Factamfos

for the year 2005-06 up to November 2005 is

364175 MT as against 278200 MT during the

corresponding period of the previous year.

During the year 2004-05 Annual production of

Sulphuric Acid recorded an all time high of 331960

MT. Annual production of Phosphoric Acid for the

year 2004-05 is 69600 MT which is the best

achieved so far.

Marketing Division: Fertiliser sales during 2004-05

was 7.84 Lakh MT as against 7.79 lakh MT during

the previous year. Compared to the last year, the

sales of Ammonium Sulphate was higher by 60564

39



MT. A significant achievement during the year

2004-05 was development of markets in other

States/Countries for Ammonium Sulphate. The

marketing cost during the year was also brought

down as no special discounts/rebates were offered

during the year, besides substantial savings in

secondary freight, godown rent and interest.

Sale of fertilisers upto November 2005 has been

6.42 lakh MTs as against 5.55 lakh MTs during the

corresponding period of the previous year. Sale of

Caprolactam for the period April-November 2005 is

19554 MT as against 26284 MTs during the

corresponding period of the previous year. On

account of unremunerative prices in the market, it

was decided to cut back on both sales and

production during this period.

FEDO & FEW: The turnover of FEDO for the year

2004-05 was Rs.3.13 crore as against Rs.6.67

crore during the previous year. During the year

2004-05 FEDO received orders to the value of

Rs.7.97 crore as compared to Rs.1.27 crore during

the year 2003-04. Value of orders on hand as on

31.3.2005 was Rs.10.27 crore.

The turnover of FEW for the year 2004-05 was

Rs.3.04 crore as against Rs.3.42 crore for the year

2003-04. Value of orders on hand with FEW as on

31.3.2005 was Rs.20.51 crore.


7.9.3 The company incurred a loss of Rs.167.96 crore

during 2004-05. The loss during April 2005 to

Keeping in view the financial difficulties of FACT, a

financial restructuring proposal was submitted by

the company, which was considered by the Board

for Restructuring of Public Sector Enterprise

(BRPSE). The recommendations made by the

BRPSE are under consideration, and a decision is

expected to be taken within the current financial

40 year.

Redressal of Public Grievances

7.9.4 A Public Grievance Cell is functioning in the

Company, coordinated by Public Relations

Department. The Cell is functioning as per norms

laid down by Government of India. At present, no

grievance received from public is pending for

redressal.

Staff Grievance Redressal Machinery

7.9.5 Under the employee grievance procedure an

a g g r i e v e d e m p l o y e e c a n s u b m i t a

complaint/request to the Department Head

through his Supervisor, who disposes it in

c o n s u l t a t i o n w i t h t h e P e r s o n n e l / We l f a r e

department. If not satisfied, he may submit a

r e v i e w b e f o r e t h e D i v i s i o n a l G r i e v a n c e

Committee, chaired by the Division Head. Further

appeal lies with the Chairman & Managing Director

whose decision shall be final. In addition, there are

inter-divisional Grievance Committee and

Corporate Grievance Committee for managerial

employees. There is also an SC/ST Grievance

Cell with the General Manager (Personnel) as the

Chief Liaison Officer and other Officers including

two belonging to SC/ST as members. An

employee can seek the assistance of an Office

bearer of his Union for pursuing the grievance at all

levels.

Employment of SCs/STs, Ex-Servicemen, Physically Handicapped & OBCs

under:


7.9.7 FACT has provision for reservation in the induction

of new dealers. As on 30.6.2005, out of a total of

8158 dealers, 546, 87 and 63 belongs to the SC,

ST and unemployed Graduate categories,

respectively.

Welfare of Minorities

7.9.8 The Company has provided various facilities as

below for the Welfare of Minority Communities,

including Land for Mosques at Ambalamedu and

Udyogamandal, Land for Christian Cemetery in

Udyogamandal, construction of Pathway to

S t . J o s e p h ' s C h u r c h n e a r J N M H o s p i t a l ,

Udyogamandal, Lands for SCI, Catholic,

Marthoma, and Jacobite Syrian Churches at

Ambalamedu, four 4 separate cemeteries for the

above 4 Christian Churches in Ambalamedu and

Burial grounds (kabristan) for Muslims at

Ambalamedu and Udyogamandal

Madras Fertilizers Limited (MFL)

Introduction

7.10.1 Madras Fertilizers Limited (MFL) was incorporated

in December 1966 as a Joint Venture between GOI

and AMOCO India Inc. of USA (AMOCO) with GOI

holding 51% of the equity share capital.

In 1985, AMOCO disinvested their shares, which

were purchased by GOI and the National Iranian

Oil Company (NIOC) in their respective

proportions on 22.07.1985. The revised share

32.45%. The share holding pattern up to May 11,

1997 was GOI 69.78% and NIOC 30.22%.

2,58,09,700 shares were subscribed. After the

161.10

The company has an authorised share capital of

Rs 365 crore comprising of Rs. 175 crore as equity

and Rs 190 crore as preference share capital. The

preference share capital is yet to be subscribed. As

on 31.3.2005, the paid-up equity was Rs 161.10

crore.

7.10.2 MFL commenced commercial production in 1971,

with an annual installed capacity of 1.7 lakh tonnes

of Nitrogen (N) and 1.12 lakh tonnes of

Phosphoshate (P). A major revamp/expansion

was carried out in 1998 at a cost of Rs. 601 crore,

enhancing the annual installed capacity to 2.54

lakh tonnes of N and 1.42 lakh tonnes of P,

corresponding to 4,86,750 MT of urea and

8,40,000 MT of complex fertilizers. However,

certain problems were also experienced in the

revamp process which led to frequent shut downs,

low capacity utilization and resultant financial

difficulties and liquidity problems. In the wake of

this, there were also problems of adjusting to the

Urea Pricing Policy and the norms of determination

of concession on decontrolled fertilizers which

came into effect in 2002-03. Over a period of time,

despite two rounds of financial restructuring,

financial difficulties and problems of capacity

Keeping this in view the Company had submitted a

financial restructuring proposal which was

c o n s i d e r e d b y t h e B R P S E , a n d i t s

recommendations are under consideration of the

Government. It is expected that a decision in this

regard would be taken shortly.

41


BVFCL-Namrup

Production Performance Financial Performance Physical Performance

7.10.3 The annual installed capacity of MFL is as follows:

During the year 2004-05, the company produced

473.0 thousand tonnes of Urea and 333.5

thousand tonnes of NPK-Complex fertilizers with

capacity utilisation of 97% and 40% respectively.

During the period from April October 2005, the

company produced 248.1 thousand tonnes of Urea

and 84.7 thousand tonnes of NPK-Complex

fertilizers. During the year 2005-2006, the

company is likely to produce 463.0 thousand

tonnes of Urea and 378.0 thousand tonnes of NPK-

Complex fertilizers with capacity utilisation of 95%

and 45% respectively.

Further during the year 2004-05, the company

produced 213 tonnes of Bio-fertilizers. The

company is likely to produce 200 tonnes of Bio-

fertilizers during the year 2005-06.

Sales Performance

7.10.4 The sales performance of the company is given

below:

42

7.10.5 During 2004-05, the Company made a net loss of

Rs 58.39 crore The accumulated loss as on

31.3.2005 was Rs 267.18 crore. For the period

April to Oct 2005 the company has reported a

provisional loss of Rs 49.68 crore and the

estimated loss for the year 2005-06 is expected to

be Rs. 58.13 crore.


7.10.6 State wise, Region wise dealers position of under

the SC/ST category is indicated bellow:

The following special terms are allowed for the

above category:

l Waiver of security deposit of Rs 5000/-

l Exemption from seasonal minimum sales norms

Brahmaputra Valley Fertilizer Corporation Limited

Introduction

7.11.1 Brahmaputra Valley Fertilizer Corporation Limited

(BVFCL) with its Corporate Office at Namrup,

Assam, was incorporated after being hived off from

the Hindustan Fertilizer Corporation Ltd. (HFCL)

w.e.f. 1.4.2002. It owns Units at Namrup (Assam).

The other establishments of the company are

Marketing Division, Liaison Offices at NOIDA and

Kolkata. The authorised share capital and paid up

capital of the company as on 31.03.2005 was

Rs.510 crores and Rs.311.48 crores respectively.

The Namrup revamp proposal, which aimed at

achieving a higher production level of 5.5 lakh

meteric tonnes per annum (LMTPA) of urea

compared to the actually achieved level of 1.5

LMPTA in the pre-revamp period against the

original designed installed capacity of 7.15 LMTPA

was approved by the Government in October, 1997

at a total cost of Rs. 350 crores. Originally, zero

date of the project was 2.11.1998 and was to be

c o m p l e t e d b y 1 . 5 . 2 0 0 1 . H o w e v e r, t h e

commissioning of the project got delayed and the

first Revised Cost Estimate (RCE) was approved

by the Government revising the cost estimate of

the project to Rs. 509.90 crore (completion cost of

Rs. 525.47 crore) and the date of commissioning

as 1.2.2002. However, out of the three units at

Namrup, Namrup-III unit re-started production

from March, 2002 and one stream of Namrup-I

(which is basically an ammonia unit) was

commissioned in May, 2002. The revamp of

Namrup-II was delayed due to various reasons

resulting in cost and time overrun. The Public

Investment Board (PIB) approved second revised

cost estimates of BVFCL's Namrup Revamp

Project of Rs. 610.24 crore, with a target of

commissioning of Namrup II by 31st December,

2004. On account of various problems, this target

could not be achieved, and Namrup-II unit was

commissioned on 22.11.2005.

7.11.2 Namrup III unit produced 2.03 LMT of urea during

2004-05 as against 2.41 LMT in 2003-04.

In the current year, the actual production of

Namrup-III unit for April - October 2005 is 1,01,470

MT of Urea, and the targeted production for

Namrup-III for the Year 2005-06 is 2,00,930 MT of

Urea.

As for Namrup II, on account of its recent

commissioning, this will be a period of trial

although a target of 45,000 MT has been fixed for

the current year.


7.11.3 BVFCL has incurred a loss of Rs. 22.54 crore

during 2004-05 against loss of Rs. 44.17 in 2003-

04. The loss upto October month during 2005-06

was Rs. 29.41 crore and projected loss is Rs. 89.45

crore during the entire year.

Sales Performance

7.11.4 The company sold 2.48 LMT of Urea during 2004-

05 as against 2.34 LMT during 2003-04. The

projected sales for 2005-06 are 2.47 LMT. The

company has made efforts towards adopting cost

effective marketing strategies, i.e. maximising sale

in economic marketing zone, economic mode of

movement, reduction in warehousing cost, freight

etc. resulting in savings in marketing cost.

Public /Staff Grievance Redressal Machinery and Welfare Activities

7.11.5 A grievance Redressal Cell is functioning at

BVFCL, Namrup for redressal of the grievances

received from the citizens.

To create a healthy working environment, the

company is providing Welfare and Recreation

facilities to its employees and their family

members. Many children of the employees have

43


earned laurels in games & sports and on the

cultural front at state, national and international

levels.

The corporation is also undertaking welfare

projects such as providing building materials to

educational and socio-cultural organizations in the

vicinity. Meritorious children of the employees' are

also given awards from the Employees' Amenities

Fund.

Employment of SC/ST, Ex-servicemen, Physically Handicapped & Other Backward Classes Persons

7.11.6 The matter of employment of persons belonging to

SC/ST, Ex-servicemen, Physically handicapped &

other backward classes are taken care of during

recruitment process. Reservation policy is being

followed as per Government guidelines. Category -

wise manpower strength is as under:

Officers Workers Total

Total no. of employees 368 1244 1612

Scheduled Caste 25 87 112

Scheduled Tribe 28 180 208

Ex-Serviceman - 17 17

Physically handicapped - 55 55

OBC 67 600 667

Reservation in dealership

7.11.7 As per the scheme for appointment of SC/ST

candidates as dealers formulated by the

Government of India, 25% of the appointment of

dealers are to be reserved for SC/ST category.

Category-wise details of which are as follows:

General : 360

ST : 39

SC : 15

44

I.B (Institutional Buyer) : 21

Total : 435

In spite of advertisement, the company is getting

very limited applications from SC/ST candidates.

All the applications received from SC/ST category

have been considered for BVFCL dealership.

FCI Aravali Gypsum & Minerals India Limited, Jodhpur

Introduction

7.12.1 The FCI Aravali Gypsum & Minerals India Limited

was incorporated under the Companies Act, 1956

as a Public Sector Undertaking on 14.2.2003 after

being hived off the Jodhpur Mining Organisation

(JMO) of Fertilizer Corporation of India Ltd. (FCI).

The authorized share capital of the company was

Rs. 10 crore as on and the paid up capital was

Rs. 7,32,98,000/- as on 31.3.2005.


7.12.2 The production/sale of gypsum in 2004-05 was

7.16 lakh MT as against 5.22 lakh MT in 2003-04.

The target of production/sale for the year 2005-06

is 7.75 lakh MT.


7.12.3 The Company has made a net profit of Rs.605.29

lakhs in 2004-05 as against Rs.261.28 lakhs in

2003-04, after making a provision of Rs.52.50

lakhs and Rs.21.75 lakhs respectively, towards

Corporate Tax. During 2005-06 the company has

projected an estimated profit of 632.43 lakhs after

providing for Tax of Rs. 73.47 lakh and dividend of

Rs.167.16 lakh (including dividend tax).

The Company declared maiden dividend of

Rs.146.60 lakh, equivalent to 20% on the Paid up

Capital, in the second year of operation itself.

Sales of Gypsum

7.12.4 The sales of Gypsum from April to October 2005

and anticipated monthwise sales from November-

to March 2006 (month wise) are as under:

Estimated Sales of Gypsum

The actual cumulative quantity of sales, sales

turnover and the provisional profit as on

31.10.2005 are 5.64 lakh MT, Rs 2803.48 lakh and

Rs. 777.54 lakh (before tax), respectively.

Grievance Cell

7.12.5 A Grievance Cell to redress the staff grievances

KRIBHCO-Hazira

has been functioning and no grievance is pending

as on date.

Employment of SC/ST, Ex-Servicemen, OBC and Physically Handicapped Persons

7.12.6 Employment of SC/ST, Ex-Servicemen, OBC and

Physically Handicapped persons as on 31st

December 2005 against a total strength of 131 is

as furnished below.

Krishak Bharati Cooperative Limited (KRIBHCO)

Introduction

7.13.1 KRIBHCO was incorporated as a Multi State

Cooperative Society on 17.04.1980 to implement

an Ammonia/Urea fertiliser project at Hazira,

based on natural gas from Bombay High/South

45

Mobile soil testing lab - KRIBHCO

B a s s e i n . T h e S o c i e t y c o m m i s s i o n e d i t s

Ammonia/Urea Plant in 1985. The Hazira complex

has two ammonia plants and four streams of Urea.

The annual reassessed capacity of the Urea Plants

is 17.29 Lakh MT. KRIBHCO has also installed a

Bio-fertiliser unit at Hazira in 1995. The capacity

of this Unit was enhanced from 100 MTPA to 250

MTPA in 1998. Two more Bio-fertiliser units of 150

MTPA capacity each have also been installed one

at Varanasi, U.P in September 2003 and another

one in Lanja, Maharashtra in March'04.

As on 31.03.2005 the paid up share capital was

Rs.393.54 crore which includes Rs.305.69 crore

(77.68%) equity of Government of India and

remaining Rs.87.85 crore (22.32%) subscribed by

the Cooperative Societies.


7.13.2 During the year 2004-05 KRIBHCO produced

18.06 lakh MT of Urea (8.31 lakh MT in terms of

nitrogen) achieving a capacity utilization of 104.4%

and 10.92 lakh MT of Ammonia achieving capacity

utilization of 108.9% based on re-assessed

capacity. The Society has also produced 560.4 MT

of Bio-fertilisers during the year.

During the year 2005-06 (up to October 2005), the

Society has produced 10.76 lakh MT of Urea (4.95

lakh MT in terms of nitrogen) achieving capacity

utilisation of 106.6%. During the whole year

(01.04.2005 to 31.03.2006), the Society is likely to

produce 18.22 lakh MT of Urea (8.38 lakh MT of

nitrogen). The Society has also produced 437 MT

of Bio-fertilisers during the year 2005-06 (upto

October 2005), and during the whole year, the

Society is likely to produce 680 MT of Bio-

fertilisers.

46

Sales Performance

Urea

7.13.3 In the year 2004-05, the Society sold 17.37 lakh

MT of own Urea, including 0.05 lakh MT exported

to Nepal, and 0.52 lakh MT of surplus Ammonia. In

the year 2005-06 (upto October 2005) the Society

has sold 11.08 lakh MT of own Urea and 0.47 lakh

MT of surplus Ammonia.

Granular Urea

During the year 2004-05 the Society also sold 0.50

lakh MT of imported Granular Urea. During the

year 2005-06 (upto October 2005) it sold 2.45 lakh

MT Granular Urea from the Indo-Oman Joint

Venture, OMIFCO.

Bio-Fertilisers

During the year 2004-05, the Society sold 611 MT

of Bio-fertiliser. This is the highest ever so far.

During the year 2005-06 (upto October 2005) the

sale of Bio-fertiliser was 366 MT. KRIBHCO has

also conducted several promotional programmes

on use and benefits of Bio-fertilisers.

Agricultural Promotion And Rural Development

7.13.4 KRIBHCO continued to organize programmes for

the benefit of farmers such as kisan melas, farmers

meetings, block demonstrations, field days,

agriculture campaigns like tree plantation, animal

and human health check-ups, farmers study visits,

cooperative conferences, group discussions, co-

operative society & village adoption programme,

technical wall painting and distribution of technical

literature, etc. The Society organized more than

1200 agricultural and rural development

programmes during the financial year 2004-05

directly benefiting more than 3.0 lakh farmers.

During Kharif-2005 the Society had adopted 24

cooperative societies & villages and continued the

above-mentioned programmes. So far 635

programmes have been organised in this season.

Analysis of soil and water samples were done

through its six mobile soil testing vans and fertiliser

application recommendations given. Besides

these, the Society adopted 8 villages for their over

all development. 109 storage-cum-community

centres have also been built till date.

The other important activities undertaken by

KRIBHCO include the following:-

1. Krishak Parivar Sangam Programme organized to

promote National Integration.

2. The Society has also has set-up a high-tech farm

advisory center at NOIDA to provide latest

information to farmers of all states. The facilities

are free and include testing of soil samples and

advise farmers regarding balanced fertilizer use

aimed at higher production and quality.

3. Other main facilities include KRIBHCO Kisan

Helplines phone 0120-2535628 and e-mail:

[email protected] for answering

queries from farmers.

Seed Multiplication Programme

7.13.5 KRIBHCO also initiated a Seed production

programme in 1990-91 to provide quality/certified

Seeds of main crops to the farmers, which has had

a very encouraging response from farmers and

Cooperative societies. The Seeds are made

available to the farmers through KBSKs, Coop.

Societies and State Coop. Federations in different

states. The Society stepped up production of

Seeds from 2928 quintals in 1991-92 to 1.54 lakh

quintals in 2004-05. This is the highest ever

production of Seeds so far. During the financial

year 2004-05, the Society has sold 1.49 lakh

quintals of Seeds.

During the financial year 2005-06, (upto October

2005) KRIBHCO has already produced 1.23 lakh

quintals of Seeds and sold 1.07 lakh quintals. In

view of the growing demand of KRIBHCO seeds,

the Society has planned to produce 2.3 lakh quintal

Seeds during 2005-06.


7.13.6 During the financial year 2004-05, the Society

earned a net profit of Rs.140.59 crores (Post-Tax),

and paid a dividend of Rs.54.88 crore @ 20%.

During the financial year 2005-06 (upto

October'05) the society has made a net profit (post-

tax) of Rs.106.73 crore. The Society envisages a

profit (pre-tax) of Rs.241.06 crore and net profit

(post-tax) of Rs.171.83 crore during the financial

year 2005-06.

Expansion and Diversification Plans

7.13.7 KRIBHCO presently has the following expansion/

diversification plans.

KRIBHCO Expansion at Hazira

KRIBHCO proposes to set up a state-of-the-art

mega size Ammonia plant of capacity 1850 MTPD

and Urea plant of capacity 3250 MTPD at the

existing fertilizer complex at Hazira. The Plant will

be based on natural gas and will have low energy

47


mailto:[email protected]



Chapter-8

Fertilizer Education Projects

consumption. Existing infrastructure facilities &

some of the offsite facilities will be utilized, resulting

in overall saving in project cost. The proposal was

approved by the PIB on 17.11.2004. The Society is

in the process of inviting tenders and firming up the

contract for the project.

Power Project At Pipavav

The Society is exploring the possibility of setting-

up a 615 MW Power Project at Pipavav in Gujarat

through a Joint Venture Company. However, the

schedule of supply and availability of Natural Gas

at Pipavav being uncertain, the Project has been

on hold till the issue of availability of gas is settled.

Equity Participations

Joint Venture Oman India Fertilizer Company,

Oman (OMIFCO)

KRIBHCO & IFFCO from India and the Oman Oil

Company, with a share holding of 25%, 25% and

50% respectively, have collaborated to set up a

world class fertilizer plant in Oman with a capacity

of 16.52 lakh MT of granular Urea per annum which

is to be purchased by Govt. of India under the long

term agreement. In addition, the plant would

produce 2.5 lakh MT of surplus Ammonia per year,

for which a long term off take agreement has been

entered into by OMIFCO with IFFCO as a part of

the overall joint venture agreement. KRIBHCO

has invested US $80 million as equity in the

project.

Commercial production of Urea has commenced

on 14th July, 2005. Till 31st December 2005

OMIFCO has produced 10.42 lakh MT of Urea and

8.22 lakh MT of Ammonia. Approximately 10.79

Lakh MT of superior quality “Granular Urea” has

been imported till 31st December 2005 on GOI

account for distribution in India. KRIBHCO and

IFFCO are currently handling the distribution of this

Urea in India.

Equity Participation in Nagarjuna Fertilizers & Chemicals Ltd. (NFCL)

Society has an equity participation of Rs.10.00

crore in NFCL, which is 2.20% of NFCL's paid up

share capital of Rs. 453.81 crore.

Equity Participation in Gujarat State Energy Generation Limited (GSEG)

KRIBHCO has invested Rs. 48.75 crore, being

30% of the equity, in Gujarat State Energy

Generation Limited (GSEG) 156 MW Power Plant.

Plant is in operation.

Information Technology

7.13.8 The Society has implemented a customized

Enterprise wide application software package for

computerizing its operations at Head Office,

Central Marketing Office, Plant, State Marketing

Offices and Area Offices using the Relational Data

Base Management System. Due to enhanced use

of IT and implementation of best practices in IT

operations, the Society has largely achieved

stabilization in its IT operations. The Applications

c o v e r I n v e n t o r y M a n a g e m e n t , F i n a n c i a l

Accounting, Payroll Application and a Provident

F u n d M a n a g e m e n t S y s t e m c o v e r i n g a l l

employees of KRIBHCO. At the plant level, an

i n t e g r a t e d s y s t e m c o m p r i s i n g F i n a n c i a l

Accounting, Payroll, Fixed Assets, Purchase,

Store, Production, Maintenance, Transportation,

Personnel & Administration and MIS, is in

operation. A comprehensive Management

Information System has been developed and

implemented in the Society.

Gramin Vikas Trust (GVT)

8.1.1 Gramin Vikas Trust (GVT), an independent legal

entity established by KRIBHCO is implementing

two projects i.e. Eastern India Rainfed Farming

Project (EIRFP) and Western India Rainfed

Farming Project (WIRFP) with technical and

financial support from the Department for

International Development (DFID) of the British

Government. The aim of the projects is to initiate a

process of widespread and sustainable/

renewable natural resources development, using

flexible, cost effective and participatory

approaches to improve the livelihood of poor men

and women in some states in the Western and

E a s t e r n I n d i a t h r o u g h f a r m i n g s y s t e m s

development and participatory research.

8.1.2 The WIRFP project (Phase-I) commenced on

01.01.1993 and EIRFP started in 1995-96. The

work of both the project was being handled under

KRIBHCO Indo-British Rainfed Farming Project

prior to the establishment of GVT in May 1999.

WIRFP (Phase-I) had a total project cost of

Rs.19.06 crore, out of which DFID contribution was

Rs.11.45 crores (reimbursable cost from DFID)

and KRIBHCO share was 1.53 crores. The total

expenditure of WIRFP Phase-I was Rs.11.17

crores. On the other hand, WIFRP (Phase-II)

started on 01.04.1999 for a period of seven years

under GVT with the total project cost of Rs.148.53

crore, which includes DFID's contribution of

Rs.81.89 crores (reimbursable cost from DFID)

and KRIBHCO's contribution of Rs.5.23 crores.

8.1.3 WIRFP (Phase-II) in its 7th year is working in seven

districts of three states i.e. M.P, (Jhabua, Dhar and

Ratlam), Rajasthan (Banswara and Dungarpaur)

and Gujarat (Panchmahal and Dahod). The

project is operating in 202 core and 497

dissemination villages involving about 7 lakh

people of 95,000 households.

8.1.4 EIRFP in its 10th year is operating in 9 districts of

three States i.e. Ranchi, Hazaribagh, Latehar and

Saraikela (Jharkhand), Dhenkanal, Keojhar and

Mayurbhanj (Orissa) and Purulia and Midnapur

(West Bengal) covering 252 core and 586

dissemination villages. It covers about 3.50 lakh

people of 75,000 households. The total outlay of

the project is Rs.27.41 crores (reimbursable cost

from DFID) for a period of 5 years (1995-2000).

The DFID funding support for EIRFP has come to

a close on 31st March 2005.

48 Extension programme - KRIBHCO 49


8.1.5 Through the above projects GVT is engaged in the

rural and agricultural development in the Western

and Eastern States of India by evolving,

developing and implementing poverty focussed

participatory approaches for agriculture research

and development through integrated farming

systems. The projects lay Emphasis on increasing

the social, natural, physical, financial and human

capital in a sustainable and equitable manner

among the community.

8.1.6 Under participatory planning and community

development, different activities have been taken

up involving the community. 3892 Self Help

Groups (SHG) have been formed, who have made

savings of Rs.273 lakhs, out of which the group

members are utilizing an amount of Rs. 147.25

lakhs in diversifying their activities. Under crop

programme 2487 MT of seeds of different crops

were distributed in the villages of WIRFP and

EIRFP to conduct 91374 Farmers' Managed

Participatory Trials (FAMPAR) and for seed

multiplication. More than 27,625 ergonomically

designed farm implements and tools have been

distributed among the farmers to reduce the

drudgery as well as increasing the work efficiency.

11072 compost pits have been constructed. About

57.10 lakh saplings for fuel, fodder and fruit trees

have been planted in about 4988-hectare waste

land as well as homestead area. More than 71133-

hectare land was treated by bunding, gully

plugging, anicut etc. for conservation of soil and

moisture. 2527 wells and 39 check dams were

constructed/renovated and 929 pump sets were

supplied for irrigation. The aquaculture

p r o g r a m m e h a s b e e n t a k e n u p i n 2 4 6

perennial/seasonal ponds in EIRFP for increasing

the rural fish production. GVT has also started a

Migrant Labour Support Programme (MLSP) to

generate more employment and reduce migration

in WIRFP area. 9,486 migrants have registered 50

their names in 32 Palayan Suchana Kendras

(PSK) and 9,396 Identity Cards have been issued

to migrants.

8.1.7 Besides, DFID Projects, under WIRFP and EIRFP

different projects of State Governments are also

being implemented on partnership basis. Some of

these projects are Watershed Development

Project in the States of Jharkhand, West Bengal,

Orissa, M.P., Rajasthan & Gujarat; Livelihood

Enhancement Project under Jharkhand Tribal

Development Society, Jharkhand; Sewa Shakti

Project in Jharkhand and Gujarat; Training of

personnel of Panchayati Raj Institutions (PRIs)

and DRDA in West Bengal, M.P., Rajasthan and

Gujarat, and Western Orissa Rural Livelihood

Project (WORLP) in Orissa. Many projects for

d e v e l o p m e n t o f n e w t e c h n o l o g y u n d e r

participatory technology development and

collaborative research are in progress with the

Agricultural Universities of respective States. GVT

has developed through collaborative research

programme and released two rice, three maize and

one chick pea variety suitable to rainfed areas.

8.1.8 During the year 2005-2006, an expenditure of

Rs.329.52 lakhs has been incurred till 30th

September'2005 in WIRFP. The cumulative

expenditure incurred in this project from

01.04.1999 to 30.09.2005 is Rs.6133.39 lakhs.

8.1.9 During the year 2004-05, an expenditure of

Rs.406.87 lakhs has been incurred in EIRFP. The

cumulative expenditure incurred on this project

from 01.04.1995 to 30.09.2005 is Rs.3704.15

lakhs.

Potash Promotion Project

(Correcting the Imbalance)

8.2.1 This project was conceptualised after a

Memorandum of Understanding (MOU) was

entered into between International Potash

Company (IPC), Moscow and Indian Potash

Limited (IPL), New Delhi on 17th February 2003.

The project was operationalised on 1st April 2003.

8.2.2 The project comprises of a comprehensive

programme for correcting the imbalance in

fertilizer application in India by increasing the

consumption of Potash to achieve N: K ratio of 4: 1

in the long run and at least 6:1 at the end of the 3

years of project period.

8.2.3 While all states in India are to be covered in this

p r o j e c t e v e n t u a l l y, t h e f i r s t p h a s e o f

implementation is as follows: -

East Zone : O r i s s a a n d W e s t B e n g a l

West Zone : M.P., Chhattisgarh, Gujarat and

Maharashtra

North Zone : U.P., Haryana, Punjab and H.P.

South Zone : Kerala and A.P.

IPL's extension programme - Potash Promotion

State of Rajasthan was also included during 2004-2005

8.2.4 Extension activities were further intensified in

2004-05 to effectively establish the need of

applying K for enhancing crop production and thus

farm income. Various field activities organized

under the project are presented below:-

51


Chapter-9

System' is applicable to DAP, MOP and NPK and have an adverse impact on soil fertility, the outcome of this project is expected by 2006.

52 53


Information Technology (IT)

8.2.5 Besides field Programme mass media

was also employed to create awareness about the

balanced fertilizer application through enhancing

the use of potassic fertilizers.

8.2.6 Technical information on the various aspects of

potash in agriculture covering the topics such as

rate of potash application, removal of potash by

crops, potash fertility status, K deficiency

symptoms on crops, method of K application etc.

were published in the form of booklets, brochures,

folders and posters and provided to field in the

language of the state. Results of crop

demonstrations conducted during 2003-04 and

2004-05 were compiled, published and circulated

for experience sharing. Agriculture magazines and

periodicals were also used to create awareness

about use of potash.

8.2.7 Two mobile Audio-Visual Units were added to the

fleet. Presently eleven mobile Audio-Visual units

have been deployed all over the country to educate

farmers through films and slides on balanced

fertilization, improved crop production and other

related aspects.

8.2.8 A 30 second radio jingle was prepared and

released from 36 stations of All India radio.

Similarly, a 30 second TV jingle was also released

in Krishi Darshan and other agricultural

programmes of Door Darshan from various

stations.

8.2.9 The Project has made a definite impact in creating

awareness about use of K which can be seen from

a 34% increase in K consumption during 2004-05

over 2003-04. The N:P:K ratio during the year

2004-05 also appreciably narrowed down to

5.5:2.2:1 from the level of 6:5:2.5:1 in 2003-04.

Integrated Nutrient Management

8.3.1 To avoid indiscriminate use of fertilizers that could

Department of Agriculture & Cooperation is

advocating the promotion of Integrated Nutrient

Management (INM) through soil test based

judicious and balanced use of chemical fertilizers

including micro nutrients, in conjunction with

organic manures, green manure, compost,

vermicompost, bio-fertilizers etc. under a Centrally

Sponsored scheme on Balanced and Integrated

Use of Fertilizers. Under this scheme, Government

is promoting establishment of new soil testing

laboratories alongwith training / orientation of staff.

At present there are 551 soil-testing laboratories

out of which 426 are static and 125 are mobile. The

total annual sample analyzing capacity of these

laboratories is 6.75 million. The minimum

requirement of soil testing in the country is,

however, much higher and 208 districts in the

country still have no soil testing laboratories.

Fertilizer companies are playing an active role in

educating farmers through their programmes on

the need to adopt soil testing and the balanced

application of fertilizers throughout the country.

Efforts are being made to further expand these

efforts, including setting up of more soil testing

laboratories.

8.3.2 In pursuance of clause 20A of FCO (1985), Ministry

of Agriculture, Department of Agriculture & Co-

operation, vide S.O. No.807 (E) dated 9.7.2004

permitted M/s. National Fertilizer, M/s. Sri Ram

Fertiliser Ltd. and M/s Indo Gulf Fertilizer to

manufacture Neem Coated Urea for a period of two

years for commercial trial from the date of issue of

notification. M/s. Tata Chemicals and M/s Chambal

Fertilizer Ltd. have also been allowed to

manufacture neem-coated urea at a commercial

level. ICAR has sanctioned an ad hoc project

entitled “Standardization of nitrification in inhibitory

principles in Neem Coated Urea” at Indian

Agricultural Research Institute, New Delhi. The

Fertilizer Management On-Line:

9.1.1 To meet the national objective of making fertilizers

available timely, proper planning and monitoring of

various aspects like fertilizer production, imports,

quality control, distribution, movement, sales,

stocks, subsidies and concessions is essential. In

order to manage thjis effectively, Fertilizer

Management On-line programme has been

formulated by the Department of Fertilizers in

consultation with the National Informatics Centre

and the following application systems are

operational:

Web Based Fertilizer Distribution And Movement Information System

9.2.1 The system maintains ECA distribution and

monthly movement orders for urea, and

i n f o r m a t i o n a b o u t f o r t n i g h t l y d i s p a t c h e s /

availability/ sales/closing stock of various

indigenous and imported fertilizers in the country.

Web Based Fertilizer Production Monitoring System

9.2.2 For planning and monitoring the fertilizer

production in the country, the application system

provides information support related to Installed

Capacity, Production Targets, Actual Production,

C a p a c i t y u t i l i z a t i o n , a n d R a w M a t e r i a l

Requirement of various fertilizer products

manufactured by the fertilizer units.

Web Based Fertilizer Concession Scheme Monitoring System

9.2.3 It facilitates release of payments and monitoring of

concessions to the fertilizer manufacturers and

importers for the sales of indigenous/imported

phosphatic and potassic fertilizers under the

Fertilizes Concession Scheme.

Fertilizer Subsidy Payment Information System

9.3.1 The application system is used for timely

processing of subsidy payment to urea

manufacturers and monitoring of various activities

pertaining to the payment of subsidy by generating

various periodic reports as well as query retrieval.

Web Based Fertilizer Import Management System

9.4.1 The Fertilizer Import Management System assists

in monitoring of the fertilizer Import Plan based on

actual imports against targets, status of import

contracts, source-wise availability of funds for

imports and maintains details of Department of

Fertilizer's authorization to State Trading

Enterprises (STEs) for import of Urea during a

scheduled period.

Web Based Fertilizer (Decontrolled) Monitoring System

9.4.2 Keeping in view a number of problems in the

existing system of sale certification by State

Governments for payment of concession under

Concession Scheme, Department of Fertilizers

has now devised an alternative mechanism for

release of payment. Accordingly, on 26.1.2006,

the Department has announced the launching of a

web based on-line 'Fertilizer Monitoring System'

for monitoring import of finished fertilizers, raw

material and intermediates required for indigenous

production, distribution and sales of decontrolled

phosphatic and potassic fertilizers in the country.

This system aims to bring transparency in fertilizer

distribution and provide an up-to-date information

to the public on the despatches and receipts of

phosphatic and potasic fertilizers to different

destinations in the country on day to day basis.

The implementation of the 'Fertilizer Monitoring

Chapter-10

these cases are still under investigation by the CBI. qualitatively made more informative and user constant effort is being made to ensure the

54 55


Vigilance Activities

will run concurrently with the present system w.e.f.

1.1.2006. Once the new system is stabilised, the

present system of sale certification will be done

away with.

Fertilizer Equated Freight Fixation Information System

9.5.1 The system fixes the equated freight rate for the

fertilizer manufacturers for transporting the

fertilizers from the fertilizer plants to the

c o n s u m p t i o n c e n t e r s , w h i c h a r e b l o c k

headquarters of States/ UTs taking into account

various parameters like ECA, despatches by

Rail/Road, Normative Rail/Road distances of

various states, Rail/Road rates, secondary rates,

etc. The fertilizer subsidy on equated freight is

calculated based on these rates and paid to the

manufacturers on monthly basis for the despatch

of fertilizer.

Fertilizer Project Monitoring System

9.6.1 The system provides detailed Information on plan

outlays and actual expenditure incurred through

Internal and Extra-budgetary Resources (IEBR)

a n d B u d g e t a r y S u p p o r t f o r v a r i o u s

schemes/projects approved by DoF during Five

Year Plans.

Information & Communication Technology (ICT) Infrastructure

9.7.1 Internet connectivity through RF link of MICNET is

available in all computer systems in the

Department's offices located in Shastri Bhawan,

Udyog Bhawan, Janpath Bhawan and Sewa

Bhawan under the DOF's Intranet consisting of 270

nodes.

Web Site

9.7.2 The web-site of Department of Fertilizers

(www.fert.nic.in) has been upgraded and

friendly to bring transparency in Government

functioning and citizen interface. The companies

under the administrative control of the Department

of Fertilizers have hosted their websites on the NIC

server to maintain the security of their content. The

companies have been provided secured Virtual

Private Network (VPN) connection of NIC to have

facility for instant updations in their websites.

E-Governance

9.7.3 As per the guidelines of Department of

Administrative Reforms & Public Grievances

(DARPG), Department of Fertilizers has taken

various measures to enhance e-Governance:

l In order to have information exchange with

fertilizer companies and other agencies, e-mail

service is being extensively used by the officials of

Department of Fertilizers.

l Various packages of office automation viz.

C o m p o s i t e P a y r o l l S y s t e m f o r C e n t r a l

Government Offices, Web based File Tracking

System, Application Monitoring System under RTI

Act, Inventory Management System, Foreign Visit

Tracking System, Board Level Appointment

System and PGRAMS (Public Grievances

Software Package) are operational in the

Department of Fertilizers.

l Hindi Word Processor facility has been provided in

all the computer systems in the Department.

10.1.1 The ambit of the supervisory, vigilance activities of

the Department extends not only to the

Department but also to the supervision of the

vigilance activities of the 10 PSUs and the one

multi state cooperative society under the

administrative control of the Department. The

departmental vigilance set up is headed by the

Joint Secretary (Administration and Vigilance) who

is the Chief Vigilance Officer designate of the

Department, assisted by Deputy Secretary

(Vigilance), Under Secretary (Vigilance) and other

vigilance staff. The Department supervises the

vigilance activities in the PSUs and the Multi State

Cooperative under its administrative control, within

the framework provided by the Central Vigilance

Commission. With the thrust on pre-emptive

rather than remedial vigilance, pro-active role is

played by the Department in ensuring not only the

prompt disposal of vigilance cases but also in

framing preventive guidelines based on which the

occurrence of vigilance cases can be minimized.

10.1.2 A constant effort is made by the Department to

streamline and simplify the procedure prevalent in

the Public Sector Fertilizer Organisations in order

to make the working of these organisations more

transparent thereby reducing the chances of

corruption and malpractices. By virtue of being the

administrative Ministry for the fertilizer sector, the

Department is entrusted with the duty of being the

watch dog of the fertilizer PSUs and this is

achieved by an energetic pursuance of the

vigilance activities in these units, coupled with

frequent inter active sessions held with the Chief

Vigilance Officers of these Organisations.

Vigilance Activities During 2005

10.2.1 The number of pending vigilance cases in the

PSUs, was 29 as on 31st Oct, 2005 as compared to

15 as on 30th November 2004. The Department

has been regularly monitoring the pending

complaints / investigations by having close inter

action with the concerned CVOs of PSUs and a

disposal of disciplinary proceedings within the time

frame provided by the Central Vigilance

Commission.

Vigilance Week Celebrations

10.3.1 The 'Vigilance Week' was celebrated during the

7th to 11th of November 2005. A number of

banners and posters were displayed in the

Department to create vigilance awareness among

the staff. The pledge was administered to the staff

by Secretary (Fertilizers) and an essay competition

on the topic “ Will the Right to Information Act, 2005

be effective weapon against corruption in public

service” was held. There was active and

enthusiastic participation from the officers and

employees of the Department in this Essay

Competition. The 'Vigilance week' was also

celebrated with earnestness in the fertilizers

P S U s , i n c l u d i n g K R I B H C O a n d v a r i o u s

competitions like Solgan writing, Essay, Debate,

Quiz etc. were held.

Surveillance And Detection

10.4.1 Agreed list of public servants as well as Public

Servants of Doubtful Integrity are complete.

Further, with a view to check corruption in the

Department, the 'Rotational Transfer of Staff' as

per the norms/guidelines issued by CVC was

implemented. Accordingly, a number of

officials/officers of the Department who were

looking after sensitive nature of work on a

particular seat for more than a five years were

transferred.

Punitive Action

10.5.1 Forty complaints were received from various

sources against the officials of PSUs, which were

got investigated/examined and appropriate action

was taken.

10.5.2 The Department had recommended two cases to

the CBI for registration of regular case during the

year 2003-04 against the officials of a PSU. Both

http://www.fert.nic.in/

Chapter-11 Chapter-12

rs

Right to Information Progressive use of official Language Hindi

Act, 2005

11.1 The Right to Information Act, 2005, (RTI) assented by the President of India on 15.6.2005 and notified on

21.6.2005. Some of the Sections of the Act, namely, Sections 4(1), 5(1) & (2), 12,13,15,16,24,27 &28 relating to

obligations of public authorities for maintenance and computerization of record/information, designation of Public

Information Officers(CPIO), Constitution of Central Information Commission and State Information Commission,

exclusion of certain organisation etc. came into force immediately. The remaining provision of the RTI Act came

into force on the 120th day of its enactment i.e. 12th Ooctober 2005.

11.2 In compliance of the RTI Act the Department has designated CPIOs and CAPIO. The respective PSUs under the

administrative control of the Department have been directed to ensure compliance of the RTI Act. Some of the

important steps taken by the Department in compliance of the Act are: -

l Created a separate link for RTI Act on its website http://fert.nic.in placing a Handbook on RTI giving general

information about the Department required under the Act.

l Orders designating PIOs, with required details, placed on website.

l Counter opened at Public Information Centre of DoF at Shastri Bhavan for applications as well as prescribed fee

under RTI.

l Appointment of Nodal Officer intimated to Department of Post enabling providing of services by that Department

as CAPIOs across the country.

12.1.1 Department of Fertilizers continued its efforts

towards increasing the use of Hindi in official work

during 2005-2006 keeping in view the Annual

Programme issued by the Department of Official

Language, Ministry of Home Affairs for

implementation of the Official language policy of

the Union. The work pertaining to the progressive

use of Hindi in the Department is under the

administrative control of Joint Secretary

(Administration), assisted by a Deputy Director

(OL). The Hindi Section consists of one Assistant

Director (OL), a Senior Translator, three Junior

Translators, One Assistant and two Lower Division

Clerks.

12.1.2 All the 201 Computers (PCs) in the Department are

equipped with bilingual facility. Adequate reading

material in Hindi has been made available in the

library of the Ministry of Chemicals & Fertilizers.

Efforts are being made to promote the use of Hindi

in the correspondence. Except one employee, all

officers/employees of the Department are having

working knowledge of Hindi. Similarly, all the

stenographers and typists, except one typist and

o n e s t e n o g r a p h e r, a r e t r a i n e d i n H i n d i

Stenography and Hindi typing, respectively.

Besides, a number of measures have been taken

for the promotion of use of Hindi in the Department,

its attached office of FICC, PSU's and the multi-


Sh. Ram Vilas Paswan, presiding over the meeting of the

56 Hindi Salahkar Samiti of the Ministry of Chemicals & Fertilize 57


http://fert.nic.in/

Department. These words/phrases are generally

58 59


state cooperative society, namely KRIBHCO,

under its administrative control. Details of these

measures are summarized below:-

Implementation of Section 3(3) of the Official Language Act.

12.2.1 In pursuance of the official language policy of the

Govt. of India, all documents covered under

section 3(3) of the Official Language Act, 1963 are

being issued both in Hindi and English. In order to

ensure issuance of correspondence in Hindi to

Central Government offices located in Region 'A',

'B' and 'C', action plan based on the checkpoints

identified in the Department has been prepared to

ensure compliance of the official language policy.

Official Language Implementation Committee (OLIC)

12.3.1 There is an Official Language Implementation

Committee (OLIC) under the Chairmanship of the

Joint Secretary (Adm.) in the Department. This

committee periodically reviews the progress made

in the use of Hindi in the Department, its attached

office of FICC, PSUs and the Multi-State

Cooperative Society, KRIBHCO on a quarterly

basis. It gives appropriate suggestions and

recommends measures to be taken for the

effective implementation of the official language

policy.

Rajbhasha Shield/Trophies

12.4.1 The Department is operating a Scheme which was

drawn up in the year 2001-2002 for the grant of

a w a r d s t o v a r i o u s P S U ' s / C o o p e r a t i v e

Societies/Offices under the administrative control

of the Department. Under this scheme, Shields for

the year 2002-03, 2003-04 and 2004-05 were

awarded in order of merit to those offices, which

were adjudged the best in the implementation of

the official language policy of the Government. The

first prize for the year 2002-03 was awarded to

KRIBHCO, second prize to IFFCO and the third

prize to NFL. The first prize for the year 2003-04

was awarded to NFL, second prize to KRIBHCO

and the third prize to RCF, and the first prize for the

year 2004-05 was awarded to KRIBHCO, second

prize to NFL and the third prize to RCF. In addition,

one prize each was also awarded to the P&I

Section, HR-II Section and Fertilizer Movement

Section of the Department for doing maximum

work in Hindi for the year 2002-03, 2003-04 and

2004-05 respectively.

Hindi Salahkar Samiti

12.5.1 With a view to render advice for effective

implementation of the official language policy of the

Government, Hindi Salahkar Samiti (Advisory

Committee) of the Ministry of Chemicals and

Fertilizers (the joint committee of the Department of

Chemical & Petro-Chemical and the Department of

Fertilizer) was reconstituted on 23.6.2005. The

first meeting of the reconstituted committee was

held on 17.12.2005 in Chandigarh under the

chairmanship of the Minister of Chemicals and

Fertilizers. The second meeting of the Committee

was held on 5.2.2006 in Goa.

Incentive Scheme for Original Noting/Drafting Work in Hindi

12.6.1 The incentive scheme for noting/drafting in Hindi

introduced by the Department of Official Language

was also continued during the year. This scheme

carries two prizes of Rs.1000/- each, three second

prizes of Rs.600/- each and five third prizes of

Rs.300/- each. Under this scheme, two employees

were given cash awards of Rs.1000/- (first prize),

three employees were given cash awards of

Rs.600/- (second prize) and three employees were

given cash awards of Rs.300/- for the year 2004-

2005.

Cash Prize Scheme for Dictation in Hindi

12.7.1 An incentive scheme for officers for giving dictation

in Hindi is in operation in this Department. Under

this scheme, there is a provision of two cash prizes

(one for Hindi speaking and other for Non-Hindi

speaking). This year a cash prize of Rs.1000/- was

given to the Non-Hindi speaking officer who gave

maximum dictation in Hindi during the year.

Hindi Day/Hindi Fortnight

12.8.1 In order to encourage the use of Hindi in official

work amongst officers/employees of the

Department, an appeal was made by the

Honourable Minister on 14th September, 2005.

During the Hindi fortnight, which was organised in

the Department from 14th September, 2005 to 28th

September, 2005, various competitions such as

Hindi Essay writing, Hindi shorthand, Hindi typing,

Hindi-English translation and poetry recital

competitions were organised and all together 73

o f f i c e r s / e m p l o y e e s p a r t i c i p a t e d i n t h e

competitions. Winners were honoured with

certificates and cash prizes by the Secretary

(Fertilizer) in the closing ceremony organised on

06.10.2005. The participants, who did not get any

prize in the competitions, were given Hindi-English

dictionary each.

Prati Din Ek Shabd

12.9.1 The Scheme named 'Prati Din Ek Shabd', which

has been launched in he Department four years

back is being continued during the year. Under this

scheme, one word/phrase in Hindi and its English

equivalent is displayed daily on the Black Board

installed on the second floor 'A' wing of the

administrative and technical in nature and are

being used in the day-to-day official work.

Hindi Workshops

12.10.1 During the year 3 workshops were organised in the

Department to encourage the officials to

undertake more work in Hindi and altogether 49

o ff i c e r s / e m p l o y e e s p a r t i c i p a t e d i n t h e s e

workshops.

Inspections Regarding Progressive Use of Hindi

12.11.1 In order to oversee the implementation of the

official language policy, 08 offices/units of different

PSUs were inspected by the officers of the

Department during the year. In addition, the first

Sub-Committee of the Parliamentary Committee

on Official Language inspected four offices/units of

the different PSUs under the administrative control

of the Department.

PSUs as on is given in the Annexure-XI. p r o j e c t o f B r a h m a p u t r a Val l e y F e r t i l i z e r

60 61


Chapter-13

Welfare of SCs/STs/OBCs and Physically Handicapped Persons in the Department

Chapter-14

Activities in the North-East Region

13.1.1 Due care has been exercised during the year

under review to implement Government's

instructions regarding recruitment and promotion

of candidates belonging to the Scheduled Castes

(SCs), Scheduled Tribes (STs), Other Backward

Classes (OBCs) and Physically Handicapped

(PHs) categories in various groups of services in

the Department. The representation of these

categories in the Department as on 17.1.2006 was

as under: -

Representation of SCs, STs, OBCs and Physically Handicapped Persons in PSUS

13.2.1 Presidential Directives on reservation for the

candidates belonging to the SCs and STs issued

from time to time by the Department of Public

Enterprises (DPE), have been implemented in all

the PSUs/Cooperative under the administrative

control of the Department. The Presidential

Directives regarding reservation for OBCs have

also been made applicable w.e.f. 8.9.93 in the

Department. The Cooperative Society viz.

KRIBHCO has also adopted the guidelines relating

to OBCs w.e.f. 1.10.95. The implementation of

these directives is being monitored in the

Department and concerted efforts are being made

to fill up the vacancies for the reserved categories.

The representation of SCs, STs, ex-servicemen,

physically handicapped persons and OBCs in the

13.2.2 B e s i d e s p r o v i d i n g e m p l o y m e n t ,

PSUs/Cooperative have been advised to prepare

and implement special programmes/schemes for

education of tribals in scientific use of fertilizers,

building up of dealer/retailer network in the tribal

areas, and making fertilizers available in small

packs in the tribal predominated areas.

Welfare Of Minorities

13.3.1 The PSUs/Co-operative under the Department

have further been advised to provide facility of pre-

examination coaching to the candidates of minority

community wherever feasible, and to take steps to

increase awareness of candidates belonging to the

communities about employment opportunities.

They have also been advised to include a

representative of the minorities in the recruitment

selection boards to ensure that the minorities get

an adequate share in the services and benefit from

development schemes.


13.4.1 The Department had instructed all the PSUs under

its administrative control to reserve at least 25% of

dealerships of fertilizers for the members

belonging to SCs/STs. To ensure availability of

sufficient numbers of suitable SC/ST candidates,

the following concession are generally given by the

undertakings:-

(a) exemption/relaxation from security deposits.

(b) preference in supply of fast moving materials.

(c) higher rate of dealership margin as compared to

that allowed to general dealers; and

(d) free training for handling of fertilizers.

13.4.2 The PSUs have also been advised to reserve 10%

of fertilizer dealerships for ex-servicemen.

14.1.1 The States of the North-East including, Sikkim face

a location disadvantage due to difficult terrain,

besides, inadequate rail and road infrastructure.

Except for the State of Assam, all other North-

Eastern States including Sikkim have very sparse

rail network. The difficulties of movement and

transportation are compounded in these States

further by problems arising out of militancy in

certain parts, limited sources of supply etc. The

per tonne cost of transportation, as a result, has

been exceedingly high as compared to the rest of

the country. These have been the major

bottlenecks to reaching urea supplies to these

States in time.

14.1.2 Considering this and with a view to ensure timely

and adequate supply of urea which would help in

boosting agriculture production in the region, the

Government decided to reimburse the freight for

carrying urea on actual basis through a Special

Freight Reimbursement Scheme. This scheme

has been introduced in lieu of the Equated Freight

Scheme for these States, including Sikkim, but

excluding Assam. The Scheme has been in

operation since 1.4.1997 and has helped in

ensuring timely distribution of urea in these States.

Under the special scheme, an expenditure of

Rs.2.29 crore was incurred during the year 2004-

05. A similar scheme is also in operation in these

States, including Assam, on movement of

decontrolled phosphatic and potassic fertilizers

covered under the Concession Scheme, at a fixed

rate from the declared railheads specific to each

State to various destinations within that State.

14.1.3 Ten percent of the annual plan budget of the

Department is earmarked as lump sum provision

for projects/schemes for the benefit of North-

Eastern Region and Sikkim. This provision is

generally utilised for funding the Namrup revamp

Corporation Limited (BVFCL). As no fund was

released for the project during 2004-05, the

amount of Rs. 14 crore earmarked for this purpose

has been transferred to Ministry of Development of

North Eastern Region, for keeping it in non-

lapsable pool fund.

both genders doing the same type of work. There

is no discrimination on the grounds of gender. This

l Special Cell for Women Employees (Supreme

Court Guidelines and Communication from

provided special facilitation rooms in offices and

lady doctors/nurses at hospitals to look after their

62 63


Chapter-15

Women Empowerment

15.1.1 The principle of gender equality is enshrined in the

Indian Constitution in the Preamble, Fundamental

Rights, Fundamental Duties and Directive

Principles. The Constitution not only grants

equality to women but also empowers the State to

adopt measures of positive discrimination in favour

of women. The Department of Fertilizers is

committed towards giving importance to women in

different spheres. Though there is no specific

scheme, as such, for women, the PSUs and Co-

operative under its administrative control are

involved in year long activities to create large scale

awareness among women with their active

participation. These programmes are aimed

towards enabling women to realise their full

potential and involvement in decision making.

Department of Fertilizers has a “Complaints

Committee” headed by an officer not less than the

level of a Joint Secretary to attend to grievances of

its women employees. Department has also

allocated a separate room for women to serve as

common room. The Department takes pride in

providing congenial environment to women

employees.

15.1.2 Rashtriya Chemicals & Fertilizers (RCF) has also

taken a number of initiatives to provide

opportunities for growth, training/learning,

ch a l l e n g i n g a ssi g n me n ts e tc. to w o me n

employees. Women are also fairly represented in

the apprenticeship trainee programme, and

currently RCF has a total of 17 Women Apprentices

being trained in various technical trades. Apart

from ensuring all benefits under legal requirements

RCF has been giving special attention to schemes

and policies for women employees such as :-

National Commission on Women)

l Committee on Sexual Harassment Cases

(Supreme Court Guidelines)

l Special Medical check-ups/ camps

RCF is one of the pioneer members in the Forum of

Women in the Public Sector (WIPS) since its

inception (1990). Some RCF women officers have

been working with the Forum as heads of

taskforces and members of committees and have

contributed in policy making and development of

women to a great extent.

15.1.3 The National Fertilizers Limited (NFL) amended its

Employees (Conduct, Discipline & Appeal) Rules

so as to include 'Sexual Harassment' to the

working women in work places as 'Misconduct'.

There is also a Complaint Centre for dealing with

the complaints of the women employees. There is

no instance of any gender inequality and both men

and women employees are enjoying equal rights.

The working atmosphere is very cordial and

harmonious.

The Company has made a budget provision of

Rs.15 lakhs in the 9th Five Year Plan towards

welfare, development and empowerment of

women employees. Accordingly, an amount of

Rs.60,000/- for each Unit and Rs.40,000/- for

Corporate Office/Marketing Division for each

financial year has been allocated.

15.1.4 The Fertilizers And Chemicals Travancore Ltd.

(FACT) provides equal opportunity to women in

recruitment to posts both in technical and

administrative disciplines. Exception has been

made only for jobs involving shift work round the

clock. Equal remuneration is paid to employees of

has given an opportunity to women officers to excel

in their field of activities and being chosen for the

coveted Merit Award given for outstanding

performance and achievements. Out of 4068

employees, 286 are women, which constitute 7%

of the total strength. In the managerial cadre, 73

out of 829 are women, which constitute 8.8% of the

managerial strength. Women executives occupy

important key positions in the management cadre

such as Dy.Chief Managers/Dy.Chief Engineers,

etc.

All statutory provisions under various laws of the

land for welfare of women employees are being

complied with. There is a full fledged and active

Complaints Committee to look into complaints.

Not less than half the members are women

including an external member who is a Lady

Professor of a reputed Social Work College. In

addition the Company sponsors a Ladies Club for

the recreational activities of women employees

and wives of male employees. There is also an

association of women employees, by the name

FACT Women Welfare Association, whose

activities are welfare oriented.

15.1.5 In Krishak Bharati Cooperative Ltd. (KRIBHCO)

work environment is very cordial and conducive.

Both men and women are provided equal

opportunities keeping in mind the principles of

equality in gender with respect to their working,

development and growth.

Women employees in KRIBHCO are given equal

opportunities for their growth and development by

imparting them specialized training and

n o m i n a t i n g t h e m i n s p e c i a l i z e d w o m e n

empowerment seminars. They have been

health requirements.

Complaint Committees headed by women officers

as chairperson have been constituted to resolve

their grievances. Special provisions have been

incorporated in CDA Rules of the Society to

prevent and act against any incidence of

misconduct relating to their harassment.

64 65


ANNEXURES

I List of Subject Allocated to the Department of Fertilizers as per Government of India (Allocation of Business) Rules, 1961

II Officers in the Department of Fertilizers including FICC during 2005-2006.

III List of Public and Cooperative Sector Undertakings under the Administrative Control of Department of Fertilizers

IV Unit-wise, Nutrient-wise Consumption, Production and Imports of Fertilizers

V Year-wise, Nutrient-wise Consumption, Production and Import of Fertilizers.

VI Sector-wise Production of Nitrogenous and Phosphatic Fertilizers

VII Sector-Wise Capacity Utilization of Nitrogenous and Phosphatic Fertilizers

VIII Profitability of Public & Cooperative Sector Undertakings under Department of Fertilizers.

IX Details of Plan outlays and Actual Expenditure

X Details of Non-Plan and Plan Expenditure During 2004-05 and Budget Provision for 2005-06.

XI Statement showing employment of SCs/STs, Ex-servicemen and Physically handicapped persons in public sector undertakings.

XII Summary of Audit observation pertaining to Department of Fertilizers

ANNEXURE - l

LIST OF SUBJECTS ALLOCATED TO THE DEPARTMENT OF FERTILIZERS AS PER GOVERNMENT OF INDIA

(ALLOCATION OF BUSINESS) RULES, 1961

(See Chapter-2)

? Planning for fertilizer production including import of fertilizer through a

designated canalising agency.

? Allocation and supply linkages for movement and distribution of urea in

terms of assessment made by the Department of Agriculture & Cooperation.

? Administration of concession schemes and management of subsidy for

controlled as well as decontrolled fertilizers including determination of retention price for urea, quantum of concession of decontrolled fertilizers costing of such fertilizers and pricing of Phosphatic and Potassic fertilizers.

? Administration of the Fertilizers (Movement Control) Order, 1960.

? Administrative responsibility for fertilizer production units in the

cooperative sector, namely, Krishak Bharati Cooperative Limited (KRIBHCO).

? Administrative responsibility for the Indian Potash Limited (IPL)

--------------------

Ms Sofia Dahiya, Dir. of Fert. Accounts ( Nov. `05) Shri Biri Singh, Dir. of Fert. Accounts (upto Nov. `05)

66 67


ANNEXURE - ll ANNEXURE - lll

MINISTERS IN-CHARGE AND OFFICERS IN DEPARTMENT OF FERTILIZERS INCLUDING

FICC DURING 2005-06

(See Chapter-2)

LIST OF PUBLIC AND COOPERATIVE SECTOR UNDERTAKINGS UNDER THE ADMINISTRATIVE CONTROL OF DEPARTMENT OF FERTILIZERS

(See Chapter-2)

Minister for Chemicals & Fertilizers Shri Ram Vilas Paswan

Minister of State for C & F Shri B.K. Handique

Secretary Shri Madhukar Gupta

Additional Secretary & Shri J.S. Maini

Financial Adviser

Additional Secretary level officers Ms. Swatantra K. Sekhon, ED, FICC

Joint Secretary Shri B.K. Sinha

Shri Vijay Chhibber

Joint Secretary level officers Shri Tejinder Singh Lascher, EA

Directors Shri Manoj Kumar Shri R.N. Dash (from January `06) Shri A.P. Singh Shri Rajneesh Goel (up to June `05)

Director Level Shri Sri Chandra

Shri P. Ranadhir Reddy Shri M.G. Banga (up to January 06) Shri J. Alam, PS to Minister (C&F and S) Shri Vilas Ghodeswar, Controller of Accounts Shri B.B. Goyal, Director, FICC (up to June`05) Shri S.K. Das, Director, FICC Shri M. Dandayudhapani (from December `05)

Deputy Secretary Shri Rajesh Agrawal

Shri R.C. Meena Shri A.N. Murty (December '05)

Deputy Secretary level Shri R.K. Balasubramanian, Jt. Dir., FICC Shri M.S. Handa, Senior PPS (upto May `05) Shri K.K. Pahuja, Jt. Director, FICC Shri R. Asokan, Director, FICC

PUBLIC SECTOR :

68 69


Private Sector

ANNEXURE - lV

UNIT-WISE INSTALLED CAPACITY, PRODUCTION AND CAPACITY UTILIZATION FOR THE

YEAR 2004-05 & ESTIMATES FOR THE YEAR 2005-06

Nitrogen (See Chapter-3)

70 71


Phosphate ANNEXURE - V

YEAR-WISE, NUTRIENTS-WISE CONSUMPTION, PRODUCTION AND IMPORTS OF FERTILIZERS

72 73


ANNEXURE - Vl

SECTOR-WISE PRODUCTION OF NITROGENOUS AND PHOSPHATIC FERTILIZERS

ANNEXURE - Vll

SECTOR-WISE CAPACITY UTILIZATION OF NITROGENOUS AND PHOSPHATIC FERTILIZERS

(See Chapter-5) (See Chapter-5)

(`000' MT)

ANNEXURE - Vlll ANNEXURE - lX

PROFITABILITY OF PUBLIC SECTOR UNDERTAKINGS & COOPERATIVE DETAILS OF PLAN OUTLAYS AND ACTUAL EXPENDITURE


(See Chapter-7) (See Chapter-5)

Rs. in Crore

* This includes Rs.14.00 crores for lump sum provision for North East Region.

** Includes Rs. 10.00 crores for lump provision for N.E. Region.

@ Government of India's equity stands reduced to 'Nil'.

Hence, no figure furnished in respect of IFFCO.

74 75


ANNEXURE - X

DETAILS OF NON-PLAN AND PLAN EXPENDITURE DURING 2005-2006 AND BUDGET PROVISION FOR 2006-2007

(See Chapter-5)

*This includes Rs. 14.00 crores for lump sum provision for North East Region.

**This includes Rs. 10.00 crores for lump sum provision for North East Region

76 Contd… 77


ANNEXURE - Xl

EMPLOYMENT OF SC/ST, EX-SERVICEMEN, PHYSICALLY HANDICAPPED & OTHER BACKWARD CLASSES (OBCs)

PERSONS IN PUBLIC SECTOR UNDERTAKINGS

ANNEXURE - Xll

SUMMARY OF AUDIT OBSERVATION PERTAINING TO DEPARTMENT OF FERTILIZERS

(See Chapter-13)

The Office of Comptroller & Auditor General of India has included the following audit observation pertaining to Department of Fertilizers in the C&AG Report.

The Fertilisers and Chemicals Travancore Limited (i) The Company did not comply with the Ministry's directions in realization of the price difference from the

dealers, which resulted in undue benefit to the dealers and loss of revenue of Rs. 3.25 crore.

(Para 8.1.1 of Report No. 3 of 2005 Commercial) (ii) The Company procured raw material from the same vendor through two different tenders with the same

delivery schedule and incurred extra expenditure of Rs. 1.77. crore.

(Para 8.1.2 of Report No. 3 of 2005 Commercial) (iii) Non-observance of sales procedure and laxity in credit control led to non-recovery of Rs. 64.94 Lakh

from a dealer for over two years.

(Para 8.1.3 of Report No. 3 of 2005 Commercial)

Madras Fertilizers Limited (i) The Company's failure to charge enhanced rates resulted in undue benefit to dealers and higher claim

of subsidy from the government to the tune of Ts. 77.80 lakh.


National Fertilizers Limited

(i) Failure of the company in assessing actual power load requirement resulted in an avoidable expenditure of Rs. 11.86 crore.


Status:- The above five Audit paras of Report No. 3 of 2005 received from the office of C&AG in the first week of February, 2006 have been sent to the concerned divisions/sections of the Department for preparation of Action Taken Notes for vetting by C&AG office.

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