Parliamentary panel expresses unhappiness over fertiliser sector not being considered as strategic
New Delhi, July 27
The Parliamentary Standing Committee on Chemicals and Fertilizers has expressed displeasure over the classification of the fertiliser sector as non-strategic under the new PSE policy despite its importance in ensuring the nation's food security.
The committee noted that while the government accepted four recommendations, it did not accept the committee's observations on 11 recommendations, prompting the panel to reiterate them. Two recommendations are still awaiting final replies, while one was not pursued further.
The report repeatedly expressed dissatisfaction with the government's responses, stating, "The Committee note that the Department's reply does not adequately address the recommendation..." while reviewing several key recommendations related to fertiliser PSUs.
The committee continued to press for the fertiliser sector to be considered a strategic sector, saying the Department of Fertilizers should furnish an updated status of its request to the concerned authorities and inform the panel of interim measures being taken to safeguard fertiliser PSUs pending a final decision.
It stated, "The Committee have been apprised of the decision of the Ministry of Finance to classify the fertilizer sector as non-strategic under the New Public Sector Enterprise (PSE) Policy, despite multiple submissions made by the Department of Fertilizers--including D.O. letters dated 24 March 2021 and 9 April 2022. These submissions highlighted the sector's critical role in ensuring food security, sustaining rural livelihoods, and advancing national self-reliance-- factors that warrant its inclusion in the strategic sector".
The report also expressed dissatisfaction over the government's response on restructuring the legacy debt of Fertilisers and Chemicals Travancore Ltd. (FACT) and Madras Fertilizers Ltd. (MFL), saying the ministry had not clarified whether any concrete proposal had been examined to address their financial stress.
It urged the Department of Fertilizers to work with the Ministry of Finance and the Department of Expenditure to examine restructuring options and report progress.
On modernisation, the committee observed that the government's response addressed only one project while failing to present a broader plan for upgrading ageing fertiliser plants.
It reiterated its recommendation for a comprehensive assessment of ageing urea and phosphatic and potassic fertiliser facilities, including their modernisation needs and investment requirements.
Further, the panel called for a comprehensive audit and monetisation framework for underutilised land held by fertiliser PSUs, saying the steps taken by the government so far were only preliminary and did not amount to the structured exercise recommended by the committee.
It also raised concerns over the government's approach to PSU assets, observing, "The Committee are concerned that the strategic assets of both HFCL and FCIL continue to remain idle under a policy of indefinite deferral, while disinvestment of profitable PSUs is being pursued."
The report also urged the government to review long-pending disinvestment proposals, undertake a long-term assessment of fertiliser demand and the strategic role of PSUs before proceeding with stake sales, and examine alternatives to disinvestment for companies such as RCF, NFL and Projects & Development India Ltd. (PDIL).
The committee said it expects the Department of Fertilizers to furnish updated action taken notes and progress reports on the reiterated recommendations at the earliest.
— ANI
Reader Comments
I understand the concerns about food security, but we also need efficiency. Some PSUs are running huge losses year after year. Why not reform them instead of just protecting them? FACT and MFL have been struggling for decades. Modernisation is key, not just labeling them strategic.
Every year same story - parliamentary committees recommend, government ignores. Meanwhile our farmers pay through their nose for urea and DAP. If fertiliser isn't strategic, what is? Food security isn't a joke. 😡
From an outsider's perspective, it seems odd that India treats fertiliser as non-strategic. If you look at countries like China, they protect their fertiliser industry fiercely. I think the Finance Ministry may be focusing too much on disinvestment targets without understanding ground realities.
Let's be realistic - we import a lot of our fertiliser raw materials anyway. Instead of obsessing over PSUs, why not focus on making our fertiliser industry globally competitive? New technology, better efficiency, less subsidy burden. The committee has valid points, but we need a modern solution, not just old protectionism.
Really appreciate the detailed reporting on this. The part about assets like HFCL and FCIL sitting idle while profitable PSUs face disinvestment is troubling. We have land and infrastructure that could be used for something productive. Hope the government takes this feedback seriously.
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