ANNUAL REPORT 2010-2011

GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF FERTILIZERS

ANNUAL REPORT 2010-2011

GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF FERTILIZERS

CONTENTS
S.No. Subjects 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Introduction Organizational Set up and Functions Development & Growth of Fertilizer Industry Availability of Major Fertilizers during 2010-11 Plan Performance Measures of Support for Fertilizers Public Sector Undertakings and Cooperative Society 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 Women Empowerment Citizen Charter/Grievance Redress Mechanism Annexure I to XVI Page No. 5-11 12-13 14-21 22-23 24-25 26-41 42-71 72-73 74-76 77 78 79-80 81-82 83-84 85 86-108

Dr. Chandra Pal Singh, Vice-Chairman and Shri B.D. Sinha, Managing Director, KRIBHCO handing over the Dividend Cheque of Rs. 37.78 crore to Shri M.K. Alagiri, Honble Union Minister for Chemicals & Fertilizers in the presence of Shri Srikant Jena, Honble State Minister for Chemicals & Fertilizers, Shri S. Krishnan, Secretary (Fertilizers), Shri Deepak Singhal, Joint Secretary (F&P), Shri S.L. Goel, Joint Secretary (P&P), Shri Satish Chandra, Joint Secretary (A&M) along with Shri N. Sambasiva Rao, Marketing Director of KRIBHCO and other officers of Ministry of Chemicals & Fertilizers, GOI.

Chapter-1
1.1 1.1.1 Introduction Agriculture which accounts for one fifth 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 plan have laid stress on self-sufficiency and self-reliance in food grains 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, food grain production rose to about 218.20 million MT in 2009-10. In Indias success in agriculture sector, not only in terms of meeting total requirement of food grains but also generating exportable surpluses the significant role played by chemical fertilizers is well recognized and established. Keeping in view the vital role played by chemical fertilizers in the success of Indias green revolution and consequent self-reliance in food-grain 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 264.86 lakh MT 2009-10, while per hectare consumption of fertilizers, which was less than 1 Kg in 1951-52 has risen to the level of 135.27 Kg (estimated) in 2009-10. 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 indigenous industry. Similarly, adequate 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. 1.2 1.2.1 Growth of Fertilizer Industry 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 Fertilizer & Chemicals Travancore of India Ltd. (FACT) at Cochin in Kerala and the Fertilizers 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 food-grains. Subsequently, green revolution in the late sixties gave an impetus to the growth of fertilizer industry in India and the seventies and eighties then witnessed a significant addition to the fertilizer production capacity. The installed capacity as on 31.03.2009 has reached a level of 120.61 lakh MT of nitrogen and 56.59 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 56 large size fertilizer plants in the country manufacturing a wide range of nitrogenous, phosphatic and complex fertilizers. Out of these, 30 (as on date 29 are functioning) units produce urea,

1.1.2

1.2.2

1.1.3

21 units produce DAP and complex fertilizers, 5 units produce low analysis straight nitrogenous fertilizers and the remaining 9 manufacture ammonium sulphate as byproduct. Besides, there are about 85 medium and small-scale units in operation producing SSP. The sector-wise installed capacity is given in the table below: SECTOR-WISE, NUTRIENT-WISE INSTALLED CAPACITY OF FERTILIZER MANUFACTURING UNITS AS ON 31.03.2010.
Sr. No. Sector Capacity (lakh MT) N 1 2 3 Public Sector Cooperative Sector Private Sector Total: 34.98 31.69 53.94 120.61 P 4.33 17.13 35.13 56.59 Percentage Share N 29.0 26.27 44.73 100.00 P 7.65 30.27 62.08 100.00

1985. As the usage of gas increased and its available supply dwindled, a number of expansion projects came up in the last few years with duel feed facility using both naphtha and gas. Feasibility of making available Liquefied Natural Gas (LNG) to meet the demand of existing fertilizer plant 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 case of phosphates, the paucity of domestic raw material has been a constraint in 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 mix of three options, viz, domestic production based on indigenous/ imported rock phosphate, imported sulphur and ammonia; domestic production based on indigenous / imported intermediates, viz. ammonia and phosphoric acid; and third, import of finished fertilizers. During 2009-10 roughly 72% of the requirement of phosphatic fertilizers was met through the first two options. In the absence of commercially exploitable potash sources in the country, the entire demand of potassic fertilizers for direct application as well as for production of complex fertilizers is met through imports. Given the volatility in international market for fertilizer in general and urea market in particular, marginal provision through imports could be used to the countrys strategic advantage. This is also desirable as the international market, especially in case of urea, is very sensitive to demand supply scenario. Under the new pricing regime for urea units applicable from 01.04.2003, for securing additional indigenous supply of urea, economically efficient units are being permitted to produce beyond their reassessed capacity to substitute/ minimize imports.

1.3 1.3.1

Self-sufficiency in Fertilizer Sector Out of three main nutrients namely nitrogen, phosphate and potash, (N,P&K) required for various crops, indigenous raw materials are available mainly for nitrogenous fertilizers. The Governments 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 Pradesh). These coal based plants have, however, been closed by Government w.e.f. 1.4.2002 due to technical and financial nonviability. However, with natural gas becoming available from offshore Bombay High and South Basin, a number of gas based ammonia-urea plants have been set up since

1.3.3

1.3.4

Dividend cheque given to Secretary (F) by MD, FAGMIL

1.4 1.4.1

Fertilizer Subsidy The subsidy on fertilizers is passed on to the farmers in the form of subsidized MRPs. The selling prices as notified by Government for the subsidized fertilizers are much lower than the normative delivered cost of these fertilizers at farm gate level. The difference between the normative delivered cost at farm gate level and the notified selling prices is paid as subsidy to manufacturers/importers on sale of fertilizers to the farmers at the subsidized prices.

1.4.2

The increase in rate of subsidy on fertilizers combined with increase in consumption of fertilizers has led to a substantial increase in requirement of subsidy. In spite of increase in cost of fertilizers, the Government has completely kept the farmers insulated from this increase in cost and have increased the subsidy allocations to meet the consumption needs of the farmer at subsidized level of prices. The subsidy on fertilizers has been increased sharply over the last few years. The details of fertilizer subsidy over the last few years are as below:-

DETAILS OF EXPENDITURE ON SUBSIDY/CONCESSION (Rs in crores) Period Amount of concession disbursed on Decontrolled Fertilizers (Indigenous+ imported) Indigenous P&K 2006-07 2007-08 2008-09 2009-10 2010-11 (BE) 6648.17 10333.80 32957.10 16000.00 13000.00 Imported P&K 3649.95 6600.00 32597.69 23452.06 15500.00 Total (P&K) 10298.12 16933.80 65554.79 39452.06 28500.00 Amount of Subsidy disbursed on Urea Indigenous Urea 12650.37 16450.37 17968.74 17580.25 15980.73 Imported Urea 5071.06 9934.99 12971.18 6999.98 8360.00 Total (Urea) 17721.43 26385.36 33939.92 24580.23 24340.73 28019.55 43319.16 99494.71 64032.29 52840.73 Total for all fertilizers

1.4.3

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, went up significantly during the eighties. 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 5% and by Rs. 240 PMT of urea w.e.f. 28.2.2003. The price increase made effective from

28.2.2003 was, however, later withdrawn w.e.f 12.3.2003. The MRP of urea i.e. @ Rs. 4830 per tonne exclusive of local levies continued upto 31-03-2010. With effect from 1-04-2010, MRP or urea increased by 10% i.e. from Rs. 4830 per MT to Rs. 5310 per MT. 1.5 1.5.1 Fertilizer Pricing Policy Given the importance of fertilizer pricing and subsidization in the overall policy environment, which has direct implications with reference to the growth and development of agriculture and sustainability of the fertilizer industry, 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 Referral Price be fixed for existing gas based urea units and also for DAP and a Feedstock Differential Cost Reimbursement (FDCR) be given for a period of five years for non-gas based urea units. 1.5.2 The Expenditure Reforms Commission (ERC), headed by Shri K.P. Geethakrishnan, had also examined the issue of rationalizing fertilizer subsidies. In its report submitted on 20 th September 2000, the ERC recommended, inter-alia, dismantling of existing RPS and in its place the introduction of a Concession Scheme for urea units based on feedstock used and the vintage of plants. 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 for replacing the RPS was formulated and notified on 30.1.2003. The new scheme took effect from 1.4.2003. It aims at inducing the urea units to achieve internationally competitive levels of efficiency, besides bringing in greater transparency and simplification in subsidy administration. New Pricing Scheme (NPS) was introduced w.e.f. 1st April, 2003. The Stage-I of NPS was of one year duration from 1st April, 2003 to 31st March 2004 and State-II was of two year duration from 1st April 2004 to 31st March, 2006. With the State-III of NPS being implemented w.e.f. 1st October 2006, the Stage-II of NPS stands extended upto 31st September, 2006. 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 units, fuel oil/low sulphur

heavy stock (FO/LSHS) based units and mixed energy based units. The mixed energy based group shall include such gas based units that use alternative feedstock/fuel to the extent of more than 25% as admissible on 1.4.2002. 1.5.6 Under NPS, escalation/de-escalation is given in respect of variable cost related to changes in the price of feedstock, fuel, purchased power and water. Under the scheme, no reimbursement is allowed in respect of investment made by a unit for improvement in its operations nor are the gains as a result of operational efficiencies to be mopped up. It has also been provided under the scheme that the concession rates during State-II shall be adjusted for reduction in capital related charges and enforcement of efficient energy norms. Pre-set energy norms for urea units during State-II of NPS have already been notified and intimated to urea units. 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 urea units. Amendments to New Pricing Scheme Stage - III for Urea Units.

1.5.7

1.5.3

1.6

Following amendments in NPS III have been made 1.6.1 It has been decided that the reduction in the fixed cost of each Urea units strictly due to Group Averaging principle under the New Pricing Scheme III will be restricted to 10% of the Normated Fixed Cost computed under the base concession rates. The limitation on reduction of fixed cost will be applicable w.e.f 1st April, 2009. Capacity utilization of Post 1992 Naptha based Group Average will be considered as 95% instead of 98% for calculating the base concession rates of urea units provided no cost towards conversion is recognized under NPS III. The approved amendments will help the indigenous urea units reduce their losses due to the group averaging under New Pricing Scheme Stage - III and help them to

1.5.4

1.6.2

1.5.5

generate resources for reinvestment in their plants towards modernization and increased efficiency. 1.6.3 To maintain stocks of urea in case there is either a shortfall in production due to disruption in supplies of feedstocks or delay/ disruption in imports and to tide over the sudden spurt in demand/shortages, a bufferstocking scheme for urea is under implementation in major States. The companies are reimbursed buffer stocking expenses on following parameters. (i) The company operating the buffer stock will be entitled to Inventory Carrying Cost (ICC) at a rate 1 percentage point less than the PLR of SBI as notified from time to time. This rate would be applicable at Rs 4650 per MT (MRP less than the dealers margin i.e. Rs 4830- Rs 180) for the quantity and the duration for which the stock is carried as buffer. In case of cooperatives, it will be at Rs 4630 per MT as dealers margin in this case is Rs 200 per MT. (ii) The company will be paid warehousing and insurance charges at the rate of Rs 23 per tonne per month on the quantity carried as buffer. (iii) Since the material will be moved in two stages i.e. from the plant to the buffer stocking point and then on to consumption points, additional handling charges at the rate of Rs 30 per MT will be paid to the Fertilizer Company on the quantity sold from the buffer stock. (iv) In addition, freight from the buffer stocking warehouse to the block in case of movement outside the district in which buffer stocking godown is located, will also be paid to the company, in accordance with the provisions under the Uniform policy for freight subsidy announced by the Government with effect from 1st April, 2008 1.7 MRP of Decontrolled P & K Fertilizers The MRP of the DAP/NPK/MOP has been constant from February 2003 to 17.6.2008.

Then Department of Fertilizers introduced nutrient based subsidy in June 2008 and accordingly, revised the MRP of NPK Complex Fertilizers downwards w.e.f. 18.6.2008. However, the MRP of the other fertilizers remained the same. The MRP of fertilizers is shown in the table below:MAXIMUM RETAIL PRICE OF FERTILIZERS (Rupees per MT)
Product From 12.3.2003 to 17.6.2008 4830 9350 4455 9350 From 18.06.08

Urea Di Ammonium Phosphate (DAP) Muriate of Potash (MOP) Mono-Ammonium Phosphate (MAP) (w.e.f. 1.4.2007) Triple Super Phosphate (TSP) (w.e.f. 1.4.2008) Single Super Phosphate (SSP) (w.e.f. 1.5.2008 to 30.6.2009) all India MRP Ammonium Sulphate (AS) (w.e.f. 1.7.2008) Grades of Complex Fertilizers - N:P:K:S 16:20:00:13 (earlier 16:20:00) 20:20:00:00 20:20:00:13 23:23:00:00 28:28:00:00 10:26:26:00 12:32:16:00 14:28:14:00 14:35:14:00 15:15:15:00 17:17:17:00 19:19:19:00

4830 9350 4455 9350

7460 3400

7460 3400

10350

7100 7280 7280 8000 9080 8360 8480 8300 8660 6980 8100 8300

5875 5343 6295 6145 7481 7197 7637 7050 8185 5121 5804 6487

10

1.8

Global Scenario Prices of Major fertilizers, such as Urea, DAP and MOP and fertilizer inputs such as Ammonia, Sulphur, Rock Phosphate and Phosphoric acid increased manifold during 2008-09. This resulted in steep increase in prices of both finished fertilizers as well as intermediates and consequently led to substantial increase in subsidy outgo of the Government. Urea Price, which was US$ 280.75 fob per MT in January 2007 increased to US$ 403.75 fob per MT in January 2008 and US $ 815 fob per MT in August 2008. Price of DAP, which was US $ 320.5 cfr per MT in January 2007 increased to US$ 802 cfr per MT in January 2008 and US $ 1331 cfr pt in May 2008. MOP price, which prevailed at US $ 170 fob per MT in January 2007 went up to US $ 328 fob per MT in January 2008 and US$ 945 fob per MT in October 2008. Raw material prices also showed exponential jumps during the last one year. Ammonia price, which, on an average, was $ 301.5 cfr (India) per in January 2007, went upto US $ 389 cfr (India) per MT in January 2008 and

US $ 834 cfr (India) in September 2008. Price of Phosphoric Acid witnessed a sharp increase during the year. Price of Phosphoric acid which was US $ 566.25 cft pt (annual contract price) for 2007-2008, went up to 1985 cfr pt in April-June 2008 and to US $ 2310 cft pt in July-September 2008. Sulphur price increased from US $ 78.75 cfr per MT in January 2007 to US $ 561 cfr per MT in January 2008 and to US $ 846 cfr pt in July 2008. Price of Rock Phosphate which was US $ 79.5 cfr pt in January 2007 went up to US $ 245 cfr pt in January 2008 and to US $ 460 cfr pt in June 2008. The spurt in international prices have impacted prices of imported finished fertilizers as well as raw material in India. As a result, subsidy outgo for 2008-09 was about one lakh crore From July 2008 to January 2010, the prices of the raw materials/intermediates/finished fertilizers have shown a declining trend. The prices in January 2010 in comparison to that of and July 2008 and March 2009 are as follows :

(US$ pmt) Raw material/intermediate/Fertilizers DAP MOP Urea FOB Phos Acid, India (C&F) Ammonia (C&F) Sulphur (C&F) Rock (C&F) Sulphuric Acid (C&F) Brazil July 2008 1291.90 725.00 783.00 2200-2310 571.10 846.00 384.00 360.00 March 2009 414.00 767.50 305.63 650.760 261.00 57.00 301.00 (in Jan, 09) 0.00-50.0 January 2010 499.13 381.25 306.88 610-627.50 327.88 139.50 142.50 35.38

11

Chapter-2
2.1 2.1.1 Organizational set up and functions The main activities of Department of Fertilizers (DOF) include planning, promotion and 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. List of subjects allocated to the Department of Fertilizers as per Government of India (Allocation of Business) Rules, 1961 amended from time to time has been given at Annexure-I. The Department is broadly divided into 5 Wings dealing with (i) Fertilizers Policy, Projects and Planning for Urea (ii) Fertilizer Policy, Projects and Planning for P&K Fertilizers (iii) Fertilizer Imports, Movement, Distribution and General Administration & Vigilance (iv) Finance and Accounts and (v) Economics and Statistics. The work of these Wings are being handled by three Joint Secretaries, one Additional Secretary cum Financial Adviser and one Economic Adviser respectively. The Joint Secretary in-charge of (P&P) looks after the work relating to Phosphatic Fertilizer Policy, P & K Subsidy payments and import on government account payments, Joint Venture Projects of P & K Fertilizers (domestic and overseas), and WTO related issues. Joint Secretary (F&P) & ED FICC (Ex officio) is entrusted with the work pertaining to Urea Policy, PSUs matters, except vigilance, Special Purpose Vehicle for exploring Joint Ventures abroad, revival of closed Urea units including FCIL and HFCL, Urea Fertilizers Joint Ventures Projects (domestic and overseas), over all project coordination 2.1.5 including JVs and long-term off-take policy. Joint Secretary (A&M) looks after the work relating to overall Fertilizer Policy Coordination, the movement of fertilizers and related policies and coordination with States, shipping and import of Urea on Government account, Parliamentary work and coordination, branch administration and vigilance, FMS, OMIFCO related matters including off-take of Urea, implementation of finalized long term off take arrangements. The Economic Adviser, an officer of Joint Secretary level advises the Department on various economic issues which have economic implications, S&T projects, matters relating to Agriculture Ministry such as Bio fertilizers, balanced fertilizers, soil health cards, nutrient absorption issues, micronutrients, organic fertilizers based on urban solid waste, subjects related to renewable and non-renewable energy, clean technology and general environmental issues, supply, demand, availability and price movement forecasting of various fertilizers, intermediates and raw materials and economic analysis of specific importance assisting in firming up policy issues. The list containing the names of Minister-incharge and the officers of the level of Deputy Secretary and above, who have worked in the Department during 2010-2011 is given in Annexure-II. Fertilizer Industry Committee (FICC) Coordination

2.1.6

2.1.2

2.1.3

2.1.7

2.1.4

2.2 2.2.1

The office of Fertilizer Industry Coordination Committee is an attached office under the Department of Fertilizers headed by Executive Director. The FICC, was initially constituted w.e.f. 01.12.1977 to administer

12

and operate the erstwhile Retention Price cum Subsidy Scheme (RPS), The Retention Price Scheme stimulated indigenous production and consumption of fertilizers in the country. However, for attaining greater internal efficiencies and global competitiveness, unit specific approach of RPS was replaced by a group based concession scheme called the New Pricing Scheme (NPS) from 01 April, 2003. The Fertilizers Industry Coordination Committee (FICC), continues under the New Pricing Scheme for administration of the scheme for urea. 2.2.2 FICC is responsible to evolve and review periodically, the group concession rates including freight rates for units manufacturing nitrogenous fertilizers, maintain accounts,

make payments to and to recover amounts from fertilizer companies, undertake costing and other technical functions and collect and analyze production data, costs and other information. 2.2.3 The FICC comprises of the Secretaries to the GOI in the Department of Fertilizers, Industrial Policy and Promotion, Agriculture and Cooperation, Expenditure, Ministry of Petroleum & Natural Gas, Chairman, Tariff Commission and two representatives of the urea industry. The Department has under its administrative control nine(9) Public Sector Undertakings (PSUs), one multi state cooperative society. The list is given at Annexure-III.

2.2.4

13

Chapter-3
3.1 3.1.1 Development & Growth of Fertilizer Industry Capacity Build-up At present, there are 56 large size fertilizer units in the country manufacturing a wide range of nitrogenous, phosphatic and complex fertilizers. Of these, 30 units (as on date 28 units are functioning) produce urea, 21 units produce DAP and complex fertilizers, 5 units produce low analysis straight nitrogenous fertilizers and 9 manufacture ammonium sulphate as by-product. Besides, there are about 72 small and medium scale units in operation producing single super phosphate (SSP). The total installed capacity of fertilizer production which was 119.60 lakh MT of nitrogen and 53.60 lakh MT of phosphate as on 31.03.2004, has marginally increased to120.61 lakh MT of nitrogen and 56.59 lakh MT of phosphate as on 01.04.2010. 3.2 3.2.1 Production Capacity And Capacity Utilization The production of fertilizers during 2009-10 was 119.00 lakh MT of nitrogen and 43.21 lakh MT of phosphate. The production target for 2010-11 was 125.16 Lakh MT of nitrogen and 48.70 Lakh MT of Phosphate, representing a growth rate of 5.2% in nitrogen and 12.7% in Phosphate as compared to production in 2009-10. Production target for nitrogenous fertilizer is more than the installed capacity. The production target for phospahtic 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 is higher than that in the corresponding period of last year 3.2.2 The production performance of both nitrogenous and phosphatic fertilizers during the year 2009-10 was satisfactory. Production of nitrogenous fertilizers was less than target by 1.84 Lakh MT, as there was no production by SPIC. The production of phosphatic fertilizers was more then target by 1.90 Lakh MT. The installed capacity of urea units in the country as follows:-

3.2.3

UREA UNITS SET UP BETWEEN: 1967-2010 WITH REASSESSED CAPACITY

Year of Comm. 1967 1969 1970 1971 1973 1975 1976 1978 1978 1979 1979 1981 1982 1982 1985 1986 1987 1988 1988 1988 1992 1993 1994 1995 1996 1997 1997 1998 1999 2005 Unit Feedstock and Sector Gas-Private Naphtha-Private Naphtha-Private Naphtha-Public Naphtha-Private Naphtha-Private Naphtha-Private FO/LSHS-Public Gas-Coop. FO/LSHS-Public FO/LSHS-Public GasCoop. Gas-Public FO/LSHS-Private Gas-Public Gas-Coop. Gas-Public Gas-Public Gas-Coop. Gas-Private Gas-Private Gas-Private Gas-Private Gas-Private Gas-Cooperative Gas-Public GasCooperative Naphtha-Private Naphtha/Gas-Private Gas-Public Installed Capacity (lakh/MT) 3.706 3.790 7.220 4.868 @ 3.993 6.200 3.800 4.785 5.445 @ 5.115 5.115 5.511 3.30 6.360 17.068 17.292 3.150 8.646 8.646 8.646 5.970 8.646 8.646 8.646 8.646 8.646 8.646 5.970 8.646 2.400 @

GSFC-Baroda SFC-Kota DIL-Kanpur MFL-Madras ZIL -Goa SPIC-Tuticorin MCFL-Mangalore NFL-Nangal IFFCO-Kalol NFL-Bhatinda NFL-Panipat IFFCO-Phulpur RCF-Trombay-V GNFC-Bharuch RCF-Thal KRIBHCO-Hazira BVFCL-Namrup-III (Formerly HFC) NFL-Vijaipur IFFCO-Aonla Indogulf-Jagdishpur NFCL-Kakinada CFCL-Gadepan TCL-Babrala KRIBHCO SHYAM-Shahjahanpur (Formerly OCFL) IFFCO-Aonla expansion NFL-Vijaipur expansion IFFCO-Phulpur expansion NFCL-Kakinada expansion CFCL-Gadepan expansion BVFCL:Namrup-II

Note: @ After revamp

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3.2.4

The following 9 urea plants of the companies 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.
Name of the Company/Unit FCI: Gorakhpur FCI: Ramagundam FCI: Talcher FCI: Sindri HFC: Durgapur HFC: Barauni RCF: Trombay-I NLC: Neyveli FACT: Cochin-I Total Date of closures 10.6.1990 1.4.1999 1.4.1999 16.3.2002 1.7.1997 1.1.1999 1.5.1995 31.3.2002 15.5.2001 Annual Installed Capacity (In Lakh MT) 2.85 4.95 4.95 3.30 3.30 3.30 0.98 1.53 3.30 28.46

3.3 3.3.1

Strategy for Growth The following strategy has been adopted to increase fertilizer production: Expansion and capacity addition/ efficiency enhancement through retrofitting / revamping of existing fertilizer plants. Setting up joint venture projects in countries having abundant and cheaper raw material resources. 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. Looking at possibilities of revival of some of the closed units by setting up brownfield units subject to available of gas.

Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9.

Note: Production by DIL-Kanpur (7.22 LMT) was suspended due to financial constraints.

3.2.5

The domestic fertilizer industry has by and large attained the levels of capacity utilisation comparable with others in the world. The capacity utilisation during 2009-10 was 98.8% for nitrogen and 76.8% for phosphate. The estimated capacity utilisation during 200910 is 99.2% of nitrogen and 76.9% of phosphate. Within this gross capacity utilization, the capacity utilisation in terms of the urea plants was 104.4% in 2009-10 and 104.3% in 2010.11. As for phosphate fertilizers, apart from the constraints mentioned earlier, the actual production capacity utilisation has also been influenced by the demand trends. The capacity utilisation of the fertilizer industry, particularly in respect of urea, is expected to improve further through revamping/ modernisation of the existing plants. The unit-wise details of installed capacity, production and capacity utilisation during 2009-10 and 2010-11 are given in AnnexureIV.

3.4 3.4.1

Feedstock Policy At present, natural gas based plants account for more than 66% of urea capacity, naphtha is used for less than 30% urea production and the balance capacity is based on fuel oil and LSHS as feedstock. The two coal based plants at Ramagundam and Talcher were closed down due to technological obsolescence and non-viability. Natural gas has been the preferred feedstock for the manufacture of urea over other feedstocks viz. naphtha and FO/LSHS, firstly, because it is clean and efficient source of energy and secondly, it is considerably cheaper and more cost effective in terms of manufacturing cost of urea which also has a direct impact on the quantum of subsidy on urea. Accordingly, the pricing policy, announced in January 2004, provides that new urea projects, expansion of existing urea units and capacity increase through debottlenecking/ revamp/modernization will be also allowed/

3.4.2

3.2.6

3.2.7

3.4.3

15

recognized if the production comes from using natural gas/LNG as feedstock. For the same reasons, a policy for conversion of the existing nephtha/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. Pursuant to formulation of policy for conversion of non-gas urea units to gas, three naphtha based plants namely, Chambal Fertilizers & Chemicals Limited (CFCL), Gadepan-II and IFFCO-Phulpur-I & II have already converted to NG/LNG. Shriram Fertilizers & Chemicals Limited (SFC-Kota) has also started using gas w.e.f. 22 nd September 2007. 3.5 3.5.1 Requirement and availability of Gas to Fertilizer Sector The projected yearwise/plantwise additional requirement of gas during the years 201112 to 2014-15 for fertilizer sector which has been communicated to Ministry of Petroleum & Natural Gas (as on January 2011) for allocation by EGoM, is as below: YEARWISE/PLANTWISE ADDITIONAL REQUIREMENT OF NATURAL GAS
S.No. Name of the unit 2011-12 A 1 2. 3 4. 5 6. I Naphtha based ZIL-Goa MCFL-Mangalore SPIC-Tuticorin MFL-Manali FACTUdyogmandal DIL-Kanpur Sub-Total of Naphtha based plants Fuel-Oil Based NFL-Panipat NFL-Nangal NFL-Bathinda GNVFC-Bharuch 0.00 0.00 0.00 0.00 0.90 1.00 0.90 0.95 0.90 1.00 0.90 0.95 0.90 1.00 0.90 0.95 0.00 0.00 0.00 1.54 0.00 0.00 1.54 1.28 1.00 1.66 1.54 0.94 1.70 8.12 1.28 1.00 1.66 1.54 0.94 1.70 8.12 1.28 1.00 1.66 1.54 0.94 1.70 8.12 Additional Requirement (mmscmd) 2012-13 2013-14 2014-15

S.No. Name of the unit 2011-12 II C 11 12 13 14 15 16 17 18 III Sub-Total of Fuel-Oil Based Expansion Units IFFCO-Kalol Kribhco-Hazira RCF-Thal CFCL-Gadepan TCL-Babrala IGFL-Jadgishpur KSFLShahjahanpur NFCL-Kakinda (AP) Sub-total of Expansion Units Total of I+II+III D 18 19 20 21 22 23 24 25 IV E 26 27 28 29 V F 30 Closed Units HFCL-Durgapur HFCL-Barauni HFCL-Haldia FCI-Ramagundam FCI-Talcher FCI-Sindri FCI-Korba FCI-Gorakhpur Sub-Total of closed units REVAMP PROJECTS KRIBHCO-Hazira NFL-Vijaipur NFCL-Kakinada RCF-Thal Sub total of Revamp Projects GREEN FIELDS PROJECTS MATIX Fert. & Chem, Burdwan 0.55 0.80 0.60 0.04 0.45 1.89 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.54 0.00

Additional Requirement (mmscmd) 2012-13 3.75 2013-14 3.75 2014-15 3.75

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 11.87

2.90 2.20 2.20 2.40 2.20 2.20 2.22 2.4 18.72 30.59

2.90 2.20 2.20 2.40 2.20 2.20 2.22 2.4 18.72 30.59

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 17.60

2.20 2.20 2.20 2.20 2.20 2.20 2.20 2.20 17.60

0.80 0.60 0.60 0.45 2.45

0.80 0.60 0.70 0.45 2.55

0.80 0.60 0.70 0.45 2.55

B 7 8 9. 10

3.20+1 (as fall back allocation) 0.00

4.75

4.75

31

ZIL-Greenfield project-Belgaun

0.00

2.46

2.46

16

S.No. Name of the unit 2011-12 32 DIL-Kanpur 0.00

Additional Requirement (mmscmd) 2012-13 3.85 (for feedstock) 1.0 (for steam generation) 0.00 1.00 2.4 12.45 26.77 2013-14 4.60 2014-15 4.60

3.5.4

33 34 35 VI

GSFC-Dahej GNVFC Oswal Chem & Fertilizers Ltd Subtotal of Greenfield Projects G. TOTAL

0.00 1.00 (CPSU) 0.00 1.55 4.98

3.50 1.00 2.4 18.71 69.45

3.50 1.00 2.4 18.71 69.45

The indigenous production capacities can come up in future with the above gas availability provided the gas is available at reasonable price. World over the price of gas is showing an upward trend but the countries rich in gas resources are having special assured price for fertilizer sector. The fertilizer sector in Middle East and North East Africa is based on gas prices of approximately 50 cents per MMBTU to $ 1.5 2 per MMBTU. This has led to a lower cost of production in these countries, which are also the major exporters of urea in the world. By producing in India, the country not only becomes self-sufficient in urea production and immune from demand driven escalation in international prices, but it also leads to increase in economic activity within the country, increase in employment, industrial development, etc. At the same level of gas prices, the country will save approximately USD 60 per MT of urea by producing within the country as compared to importing from Middle East countries on price equivalent to cost of production. The savings will be on account of lower capital cost (USD 20 per MT approx), shipping freight (USD 20 per MT) and port handling charges (USD 20 per MT). In addition, there will be savings on account of internal transportation of urea depending upon the location of the plant. In addition to the issue of availability in pricing of gas, the other major important issue in this sector is provision of gas pipeline connectivity to the existing urea units in the country and proposed urea units in future. At present 8 operational units are not on the gas grid and their connectivity with the gas grid is critical for their conversion to gas. Further 8 closed units of FCIL and HFCL are presently away from the gas grid and their connectivity with gas pipeline is prerequisite for revival of these closed units. Ministry of Petroleum and Natural Gas has projected the following pipeline connectivity of gas to existing and closed units in the country will be provided by 2012:-

3.5.2

It is expected that with the above availability of gas, the production capacities in existing units will increase, closed fertilizer units will be revived new Greenfield/Brown field projects will be set up and non gas based fertilizer plants will be converted to gas, taking the overall production capacity of urea in the country to more than 31 million tonnes. Likewise, the projected requirement of urea by the end of 11th Plan is expected to be around 31 million tones including the required quantities for maintaining the supply chain and buffer stocks. It is expected that with above availability of gas at reasonable prices, the country will become self-sufficient in urea requirement by the end of 11th Plan. The above availability of gas will also help our country to become an export surplus nation in urea sector. The above requirement of gas is based on the desired need to make the country selfsufficient in urea production. This is necessary in light of the fact that our agricultural sector needs to be insulated from the volatile international prices of fertilizers and at the same time the fertilizer subsidy bill need to be reduced. Urea is the only fertilizer, in which the country can become self-sufficient with the projected availability of gas in future. In phosphatic and potassic sector, we are largely import dependent and are subject to large-scale volatility in world prices of these fertilizers.

3.5.5

3.5.6

3.5.3

17

PIPELINE CONNECTIVITY PLAN ( As provided MoPNG) S.No. Proposed pipeline Agency for connecting plants Fertilizer unit proposed to be connected Expected year of connectivity

Naphtha based plants 1 2 3 4 5 Dhabol.-Gogak-Bangalore Chennai-Bangalore-Mangalore GAIL RGTIL ZIL, Goa MCFL, Mangalore FACT,Cochin SPIC, Tuticorin MFL, Chennai 2012 Dec-12 2012 Dec-12 Dec-12

Kochi-Kanjrrikod-Bangalore-Mangalore GAIL Chennai-Tuticorin Kakinada- Chennai Fuel Oil/LSHS based plants RGTIL RGTIL

Dadri-Bawana-Nangal Closed units

GAIL

NFL- Nangal, Panipat, Bhatinda

2009-10

6 7

Spur on Kakinda to Uran via Hyderabad Spur from the following pipeline : Jagdishpur-Haldia

RGTIL GAIL

FCI, Ramagundam FCI, Sindri FCI, Gorakhpur HFC, Barauni HFC, Durgapur HFC, Haldia FCI,Talcher Country assured sources of supplies of Urea and Phos acid, a critical input for production of Phosphatic fertilizers. Further two more projects JIFCO Jordan and TIFERT Tunisia are about to be commissioned in the year 2010. The details of the existing joint venture in the fertilizer sector are:

8 3.6. 3.6.1

Spur from Kakinada-Haldia Pipeline Joint Ventures abroad

RGTIL

Due to constraints in the availability of gas in the country, which is the preferred feed stock for production of nitrogenous fertilizers, a near total dependence of the country on imported raw materials for production of Phosphatic fertilizers and full import dependence for MOP, the Government has been encouraging Indian companies to establish Joint ventures production facilities with buy back arrangement in other countries, which are rich in fertilizer resources. Existing joint ventures, namely Oman India Fertilizer Company (OMIFCO), Oman in Urea and Industries Chimiques du Senegal (ICS), Senegal and Indo-Maroc Phosphor (IMACID), Morocco in Phosphate have given the

3.6.2.1 OMIFCO Oman: Krishak Bharati Cooperative Ltd. (KRIBHCO), Indian Farmers Fertilizers Cooperatives Ltd. (IFFCO) and Oman Oil Company with respective share holding of 25%, 25% and 50% have collaborated and set up a world class urea-ammonia fertilizer plant Oman India Fertilizer Company (OMIFCO), in Oman at a cost of US $ 892 million. It consists of

3.6.2

18

5060 MTPD granular urea and 3500 MTPD Ammonia plants along with utilities in the coastal town of Sur in Oman. The annual capacity of the fertilizer complex is 16.52 lakh MT of granular Urea. The entire quantity of Urea is off taken by the Government of India as per Urea Off-Take Agreement (UOTA) at pre determined prices. Government of India also off takes surplus quantity of Urea, if any, as per price agreed for the additional quantity. In addition, 2.5 lakh MT of surplus Ammonia per year is also produced by the Plant for which IFFCO has Ammonia Off-Take Agreement (AOTA). OMIFCO is examining possibility of expansion and increase in production of Urea and Ammonia. 3.6.2.2 ICS Senegal The Government of India (GoI), Indian Farmers Fertilizer Cooperative Ltd. (IFFCO) and Southern Petrochemicals Industries Corporation Ltd. (SPIC) formed a joint venture company in Senegal named Industries Chimiques du Senegal (ICS). Later on SPIC withdrew from the project. In recent past, the company suffered financial losses. However, ICS Senegal has been restructured in 2008 with Government of India, IFFCO and other Indian consortium partners having 85% and Government of Senegal having 15% share. The restructuring plan after having been approved by the Regional High Court of Dakar (Senegal) on 27.3.2008 has come into effect and ICS Senegal, as restructured is in operation. ICS Senegal has a capacity to produce 6.60 lakh tones of phosphoric acid per annum and also finished phosphate fertilizer such as DAP and Complex fertilizers. A major portion of the phosphoric acid, about 5.5 LMT produced in the ICS plant is off-taken by IFFCO as per a long term buy back arrangement and utilized for production of phosphate fertilizers in India. The finished fertilizers, DAP and complex fertilizers, produced by ICS Senegal is for domestic consumption in Senegal.

3.6.2.3 IJC Jordan SPIC, Jordan Phosphates Mines Company Ltd. (JPMC) and Arab Investment Company (AIC) set up a joint venture project, IndoJordan Chemicals Company Limited (IJC) in Jordan in May 1997 with a capacity of 2.24 lakh tonnes of phosphoric acid production per annum. 52.17% of the equity of the joint venture is held by SPIC, 34.86% by JPMC and 12.97% by AIC. Phosphoric Acid produced by IJC is off-taken by SPIC and other fertilizer units in India. 3.6.2.4 IMACID Morocco IMACID, a joint venture between Office Cherifien des Phosphates (OCP), Morocco, and Chambal Fertilizers & Chemicals Ltd. (CFCL), India to produce 3.60 lakh MT of phosphoric acid per annum was commissioned in Morocco in October 1999. After subsequent joining of Tata Chemicals Limited (TCL), capacity of the plant has been increased to 4.30 LMT per annum. Initially, 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. 3.7 3.7.1 Overseas Joint Ventures Under Implementation / Consideration: JIFCO Jordan Indian farmers Fertilizers Cooperative Ltd (IFFCO) and Jordan Phosphate Mining Company (JPMC) have agreed for setting up of a joint-venture Phosphoric Acid production plant, Jordan India Fertilizer Company (JIFCO) in Jordan with an installed capacity of 1500 MT of phosphoric acid per day (MTPD). Equity hodling in the project is 52:48 between IFFCO and JPMC, respectively. The plant is expected to be commissioned in 2010. 3.7.2 TIFERT Tunisia Gujarat State Fertilizers & Chemicals Ltd (GSFC) and Coromandel International Ltd

19

(CIL), formerly Coromandel Fertilizers Ltd.(CFL) both Indian entities alongwith Groupe Chimique Tunisien (GCT) & Compagnie Des Phosphates De Gafsa (CPG), both Tunisian entities are setting up a joint venture project, Tunisian Indian Fertilisers S.A. (TIFERT) at Skhira in Tunisian for production of 3.6 lakh MT of Phosphoric Acid per annum. The entire production of phosphoric acid would be for off take by GSFC and CIL. An MOU to this effect was signed in October, 2005 between parties. Estimated cost of the project is approx. US $ 165 million + 5% with equity of US$66 million and borrowings of US $99 million. The project is expected to be commissioned in 2010. 3.7.3 Cooperation in Syria The India-Syrian Joint Commission in its meeting held in January 2008 took note of the mutual interest of both countries in the field of Phosphatic raw-materials and products. It was agreed that both countries would work for cooperation in the fertilizer sector in Syria. Accordingly, a consortium of Indian entities including MECON, RITES and PDIL (All central Government PSUs), having expertise in the fields of mining, beneficiation, processing, setting-up and running the phosphatic plants and logistic aspects are undertaking capacity enhancement consultancy study with GECOPHAM in Syria. Government of India is funding the study. As per the MOU signed between this Department and GECOPHAM in May 2009, the Indian consortium undertook the feasibility studies, which have now been completed and the Pre-Feasibility Report has been submitted to the Syrian Authorities. A Government level MOU spelling out broad frame work of cooperation in Phosphate sector between the Countries has also been signed in Oct2010. A delegation from DOF and the consortium is visiting Syria in February2011 to discuss the Draft Feasibility Report and other modalities to proceed further, with the Syrian Authorities.

3.7.4

Cooperation with Russia On 12.03.2010 an MOU has been signed between the Government of India and the Government of Russia, during the visit of Prime Minister of Russia to India, envisaging inter-alia encouraging collaboration in the areas of trade, production, possible establishment of Joint Ventures, investment and R&D activities, exchange of information and holding of consultations on the issues of production and consumption of mineral fertilizers, exchange experience encourage contacts between the specialists, organization of Joint Conferences, symposia and business events on the issues of Cooperations in the sector of mineral fertilizers.

3.7.5

Cooperation in Indonesia A team led by the Secretary (F) VISITED Indonesia during 30.10.2010 to 02.11.2010 to hold preliminary discussions with the Indonesian Authority to ascertain the technical feasibility of putting up of an Ammonia Urea plant based on Coal Gasification Technology. During the visit of the President of Indonesia Chief Guest on occasion of the Republic Day is Jan2011 following two documents have been signed: (i) MOU for setting up an Ammonia Urea Plant in Indonesia and agreement for offtake of surplus urea produced in the plant. (ii) Agreement for supply of 3 lakh MT of Urea and 2.5 LMT of NPK Complex fertilizer in designated grades.

3.7.6

Cooperation in Australia Indian Farmers Fertilizer Cooperative Ltd (IFFCO) has entered into a Principles of Offtake Agreement with Legend International Holdings of Australia to undertake joint mining of rock phosphate in Lady Annie mines (Georgina Basins in Queens land) along with an assured three million MT annual off-take. A total of US $800 million investment has been envisaged for undertaking rock phosphate mining in

20

Australia. IFFCO will receive 30 million options in Legend International Holdings. IFFCO would provide both technical and financial facilitation to Legend International Holdings in the development of its phosphate mining and shipment of its product to India. In Ammonia-Urea sector, KRIBHCO and NWCF, a private company in Australia are in the process of setting up of a coal bases ammonia-urea plant in Australia. The project cost is approx. US $ 2.6 billion and KRIBHCOs equity will be approx. US $ 165 million. The Australian company proposed to enter into a 20 year agreement for supply of urea. Agreement on mutual Terms & Conditions including the price on which the urea will be made, are yet to be finalized. 3.7.7 Cooperation in Ghana Given its gas reserves, Ghana is considered a rich source of nitrogenous feedstock. Chairman of Ghana National Petroleum Corporation (GNPC), Ghana during his visit to India, in Sep2009 and discussed with the Secretary (F) the possibility of cooperation in Fertilizer sector was discussed. It was proposed to set-up a Ammonia-Urea plant (Gas based) in Ghana. To give proper shape to the project proposal, an MOU has been signed in July2010 at the Government level between the Countries. As per MOU, to proceed further a technical team comprising of Officers from RCF & PDIL visited Ghana. Site selection Report and the Pre-feasibility reports were prepared by RCF and PDIL, which were provided to Ghanian Authorities. In January2011 a team led by Secretary (F) visited Ghana to discuss further modalities in the matter. Ghanian Authorities have been requested for a quick decision on pricing of Gas. 3.7.8 Discussions for cooperation in fertilizer sector

countries for long term cooperation for setting up of projects for production and off take of fertilizers: (i) Discussion at Government level is underway with the Government of Senegal for development of Matam phosphate mines. (ii) Two separate consortia of Indian entities comprising IPL & IFFCO and MMTC & RCF are in discussion with M/s Potash One and M/s Athabasca Inc respectively of Saskatchewan province for setting up Joint Venture projects in mining of Potash and off take to India. Consortium of RCF and MMTC which is pursuing with Athabasca, have signed an MOU for JV project with Athabasca for evaluation and assessment in technical, marketing and financial aspect. They have also signed a confidentiality Agreement for sharing related information. Consortium of IFFCO and IPL have requested PotashOne for providing detailed costing and other economic parameters involved in the project. (iii) RCF and IDC/FOSKOR of South Africa are exploring the possibilities to set up a Phosphoric Acid and Ammonia-Urea fertilizer project near Maputo Port, the capital city of Mozambique. The project proposes to source Rock from the new mines of Foskor in Phalaborwa, South Africa. An MOU has been signed between RCF and IDC/FOSKOR. Department of Fertilizers has been pursuing with M/s SASOL, for allocation of gas in Mozambique for setting up a JV ammoniaurea project. 3.7.8.2 M/s SPIC and Chambal Fertilizers are in the process of setting-up a gas based nitrogenous fertilizer plant at Dubai in UAE to produce 4.00 LMT of urea per annum. 3.7.8.3 Discussion are also going on for exploring possibilities for a Ammonia-Urea project Qatar with buy back by India. IFFCO and QUAFCO (Public sector entity of Qatar) have signed Agreement of Intention on 24.2.2009 for the same.

3.7.8.1 Discussion are on with the fertilizer and mining entities in following resource rich

21

Chapter-4
4.1 Availability of Major Fertilizers During 2010-11 4.2 anywhere in the country at notified maximum retail price. Decontrolled Fertilizers DAP & MOP

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 2010 season as well as during the current Rabi 2010-11(Up to December, 2010).

Kharif 2010 4.2.1 In case of fertilizers other than the urea, which are decontrolled, no allocation is made under Essential Commodities Act (ECA) 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 at the national level. DAP and MOP are the two major decontrolled and decanalised fertilizers, which may be imported freely.

Kharif 2010 4.1.2 The field opening stock of 2.21 LMT as on 1.4.2010 coupled with indigenous production of 104.12 LMT and imports of 25.83 LMT helped in progressively ensuring adequate availability to the States throughout the season. The cumulative availability of urea at the end of the season was nearly 132.16 LMT against the assessed requirement of 136.65 LMT. The sales of 126.02 LMT urea during Kharif 2010.

4.2.2

DAP 4.2.3 The imports of 57.85 LMT of DAP coupled with indigenous production of -19.14 LMT and the opening stock of 2.02 LMT of DAP as on 1st April, 2010 resulted in satisfactory availability of about 79.01 LMT DAP during Kharif 2010 season against the assessed requirement of 68.75 LMT. The sales of DAP in Kharif 2010 were about 65.05 LMT.

Rabi 2010-11 4.1.3 The requirement of urea for Rabi 2010-11 has been assessed at 154.14 LMT envisaging a growth of about 8.79% over the sales of 141.69 LMT in Rabi 2010-11. The requirement is being met from the opening stocks taken together with estimated production of 108.55 LMT and imports of about 54.90 LMT during the season. Thus the cumulative availability of urea for Rabi 2010-11 has been estimated to be about 168.55 LMT by the end of 31st March, 2011. Allocation of urea was restricted to 50% of production of installed capacity of each manufacturer during Kharif 2010 and Rabi 2010-11. The manufacturers are free to sell the remaining quantity of urea to the farmers

MOP 4.2.4 The imports of 26.54 LMT of MOP taken together with opening stock of 0.97 LMT as on 1st April, 2010 resulted in availability of about 27.51 LMT during Kharif 2010 season against the assessed requirement of 22.98 LMT. The sales of MOP were reported as about 19.63 LMT.

4.1.4

Rabi 2010-11 DAP 4.2.5 The production of DAP during Rabi 2010-11 is estimated to be about 18.53 LMT. Stocks

22

as on 1.10.2010 coupled with estimated imports will be adequate in meeting the countrys requirement of DAP assessed at 52.17 LMT during Rabi 2010-11, considering that about 5.88 LMT of DAP will be surplus towards the requirement of Rabi 2010-11. MOP 4.2.6 Stocks of MOP as on 1.10.2010 coupled with adequate imports till March 2011 will ensure that the countrys requirement of MOP during Rabi 2010-11 is fully met. Following table summarizes the season-wise position in respect of the availability and sales of the major fertilizer i.e. Urea, DAP & MOP during the last three seasons:
Demand Assessment Cumulative Availability Cumulative Sales %age of availability to assessed demand 95.94 132.47 104.16 98.14 73.93 130.71 96.71 114.92 119.71

4.3 4.3.1

Movement of Fertilizers 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 Statewise requirement assessed by the Department of Agriculture & Co-operation (DAC). The distribution of imported urea is made keeping in view the requirements of each of the States. The major share in transportation of fertilizers is of the Railways. During 2009-10, Railways had moved about 75% of the fertilizers produced and/or imported in the country. Judicious management of the demand-supply balance has helped in maintaining the average lead of fertilizer movement by rail. During 2009-10 the average lead was 827 KMs. During the current year the average lead for the period April-November, 2010 would also be almost same.

4.2.7

4.3.2

Crop season

4.3.3

Kharif 2009 Urea DAP MOP Rabi 2009-10 Urea DAP MOP Kharif 2010 Urea DAP MOP

136.36 49.21 21.61 145.53 57.77 22.24 136.65 68.75 22.98

130.83 65.19 22.51 142.83 42.71 29.07 132.16 79.01 27.51

122.78 61.34 18.52 141.69 42.57 28.21 126.02 65.05 19.63

23

Chapter-5
5.1 5.1.1 Plan Performance 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 5th year of tenth plan (2006-07) are indicated below: 5.1.3 Year-wise consumption, production and imports of fertilizers in nutrients terms are given in Annexure-V The production of fertilizers in nutrient terms during 2009-10 was 119.00 lakh MT of nitrogen and 43.21 lakh MT of phosphate.

5.1.4

INSTALLED CAPACITY AND PRODUCTON OF NITROGENOUS AND PHOSPHATIC FERTILIZERS IN EIGHT, NINTH AND TENTH FIVE YEAR PLANS. (In lakh MT) Sr. No 1 Particulars At the end of Eighth Five Year Plan (1996-97) 97.77 29.05 85.99 25.56 At the end of Ninth Plan (2001-02) 120.58 52.31 107.68 38.60 At the beginning of 5th year of Tenth Plan (2006-07) 120.61 56.59 115.78} 45.17}

Capacity i) Nitrogen ii) Phosphates Production i) Nitrogen ii) Phosphates

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, (since taken over by IFFCO), Indo-Gulf Corporation-Dahej and Gujarat State Fertilizers Company Ltd.-SikkaII. Consequent upon reassessment of urea capacity on the basis of Dr. Y.K. Alagh Committee and DAP capacity by Tariff Commission, despite phasing out of 10 urea units due to closure, the installed capacity of nitrogen and phosphate has increased from 97.77 lakh MT at the end of eighth plan to 120.61 lakh MT and 29.05 LMT to 56.59 LMT respectively during the same period.

The estimated production for 2010-11 is 121.75 lakh MT of nitrogen and 45.32 lakh MT of phosphate. Sector-wise targets and achievements in respect of production and capacity utilization from 2001-02 onwards are given in Annexures-VI & VII. 5.2 5.2.1 Plan Outlays For the Eleventh Five Year Plan (2007-12), Planning Commission has approved an outlay of Rs. 20627.87 crore consisting of Rs. 1492.00 crore as Domestic Budgetary Support and Rs. 19135.87 as Internal & Extra Budgetary Resources (IEBR). For the year 2010-11, a plan outlay of Rs. 2914.99 crore was approved by the Planning Commission, with Rs. 2699.99 crore to be met out of IEBR and balance amount of Rs.

5.2.2

24

215 crore as budgetary support. The details of Plan outlays are given Annexure-VIII. 5.2.3 The outlays for 2011-12 is Rs. 3550.22 crore, of which an amount of Rs. 3325.22 crore will be met from the internal and extra budgetary resources and the balance amount of Rs. 225.00 crore will be provided by way of budgetary support. The gross outlay of Rs. 3550.00 crore is for FCI-FAGTMIL (Rs. 4.15 crore), Fertilizers ad Chemicals Travancore Ltd (Rs. 60.74 crore), Bramhaputra Valley Fertilizer Corppration Ltd (Rs. 67.80 crore), Madras Fertilizers Ltd. (Rs. 88.95 crore), National Fertilizes Ltd (Rs. 2363.08 crore), Project and Development of India Ltd. (Rs. 9.73 crore), Rashtriya Chemicals & Fertilizers Ltd (Rs. 293.30 crore). Krishak Bharati Cooperative Ltd (Rs.654.96 crore) and other Mis. Departmental Schemes such as (MIS/IT and R&D) 7.50 crore. Department of Fertilizers is exploring possibilities of Joint Ventures abroad. Since there is no firm proposal in hand right now only a token provision of Rs.

0.10 crore has been provided. 5.2.4. Of the total outlay, the budgetary support of Rs. 225.00 crore is for Fertilizers & Chemicals Travancore Ltd. (Rs. 60.74 crore), Madras Fertilizers Limited,(Rs. 88.95 crore), Bramhaputra Valley Fertilizer Corporation Ltd (Rs. 67.80 crore) and other Departmental Schemes (Rs. 7.50 crore). Under the other Departmental Schemes, there is a provision of Rs. 2.00 crore for S&T Programme: Rs. 5.50 crore for Information Technology, Rs. 0.001 crore has been for investment for Joint Ventures abroad. 5.2.5. For the year 2010-11, there was net budgetary provision of Rs. 50,215.00 crore. Rs. 215.00 Crore under Plan and Rs. 50,000.00 crore under Non-Plan. In the Revised Estimates (RE) for 2010-11, the net provision is Rs. 55,215.00 crore, Rs. 215.00 crore under Plan and Rs. 55.000.00 crore under Non-Plan. The details of Non-Plan and Plan Provision in 2010-11 (BE) and (RE) are given in Annexure-IX.

25

Chapter-6
6.1 6.1.1 Measures of support for fertilizers For sustained agricultural growth and to promote balanced nutrient application, it is imperative that fertilizers are made available to farmers at affordable prices. With this objective, urea being the only controlled fertilizer, is sold at 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 for urea units and the Concession Scheme for decontrolled phosphatic and potassic fertilizers. The statutorily notified sale price and indicative MRP is generally less than the cost of production of the respective manufacturing unit. 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 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 as assessed by the Government plus 12% post tax return on networth) and the statutorily notified sale price was paid as subsidy to each urea unit. Retention price used to be determined unit wise, which differed from unit to unit, 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 along with increasing use of chemical fertilizers, the scheme had been criticized for being cost plus in nature and not providing incentives for encouraging efficiency. 6.2.2 Given the importance of fertilizer pricing and subsidization in the overall policy environment, which has direct implications with reference to the growth and development of agriculture and sustainability of the fertilizer industry, 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 Referral Price be fixed for existing gas based urea units and also for DAP and a Feedstock Differential Cost Reimbursement (FDCR) be given for a period of five years for non-gas based urea units. The Expenditure Reforms Commission (ERC), headed by Shri K.P. Geethakrishnan, had also examined the issue of rationalizing fertilizer subsidies. In its report submitted on 20 th September 2000, the ERC recommended, inter-alia, dismantling of

6.2 6.2.1

6.2.3

26

existing RPS and in its place the 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 for replacing the RPS was formulated and notified on 30.1.2003. The new scheme took effect from 1.4.2003. It aims at inducing the urea units to achieve internationally competitive levels of efficiency, besides bringing in greater transparency and simplification in subsidy administration. 6.2.5. New Pricing Scheme (NPS) for urea was introduced w.e.f. 1st April, 2003. The StageI of NPS was of one year duration from 1st April, 2003 to 31st March, 2004 and StageII was of two year duration from 1st April to 31st March, 2006. With the Stage-III of NPS being implemented w.e.f. 1st October, 2006, the Stage-II of NPS stands extended upto 31st September, 2006. 6.2.6 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 units, fuel oil/low sulphur heavy stock (FO/LSHS) based units and mixed energy based units. The mixed energy based group shall include such gas based units that use alternative feedstock/fuel to the extent of more than 25% as admissible on 1.4.2002. Under NPS, escalation/de-escalation is given in respect of variable cost related to changes in the price of feedstock, fuel, purchased power and water. Under the scheme, no reimbursement is allowed in respect ofinvestment made by a unit for improvement in its operations nor are the gains as a result

of operational efficiencies to be mopped up. 6.2.8 It has also been 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. Pre-set energy norms for urea units during Stage-II of NPS have already been notified and intimated to urea units. 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 urea units. Amendments to New Pricing Scheme Stage - III for Urea Units. Following amendments in NPS III have been made 6.3.1 It has been decided that the reduction in the fixed cost of each Urea units strictly due to Group Averaging principle under the New Pricing Scheme III will be restricted to 10% of the Normated Fixed Cost computed under the base concession rates. The limitation on reduction of fixed cost will be applicable w.e.f 1st April, 2009. Capacity utilization of Post 1992 Naptha based Group Average will be considered as 95% instead of 98% for calculating the base concession rates of urea units provided no cost towards conversion is recognized under NPS III. The approved amendments will help the indigenous urea units reduce their losses due to the group averaging under New Pricing Scheme Stage - III and help them to generate resources for reinvestment in their plants towards modernization and increased efficiency. To maintain stocks of urea in case there is either a shortfall in production due to disruption in supplies of feedstocks or delay/ disruption in imports and to tide over the sudden spurt in demand/shortages, a buffer stocking scheme for urea is under implementation in major States. The companies are reimbursed buffer stocking expenses on following parameters.

6.3

6.3.2

6.3.3

6.2.7

27

The company operating the buffer stock will be entitled to Inventory Carrying Cost (ICC) at a rate 1 percentage point less than the PLR of SBI as notified from time to time. This rate would be applicable at Rs 4650 per MT (MRP less than the dealers margin i.e. Rs 4830- Rs 180) for the quantity and the duration for which the stock is carried as buffer. In case of cooperatives, it will be at Rs 4630 per MT as dealers margin in this case is Rs 200 per MT. I. The company will be paid warehousing and insurance charges at the rate of Rs 23 per tonne per month on the quantity carried as buffer. Since the material will be moved in two stages i.e. from the plant to the buffer stocking point and then on to consumption points, additional handling charges at the rate of Rs 30 per MT will be paid to the Fertilizer Company on the quantity sold from the buffer stock. In addition, freight from the buffer stocking warehouse to the block in case of movement outside the district in which buffer stocking godown is located, will also be paid to the company, in accordance with the provisions under the Uniform policy for freight subsidy announced by the Government with effect from 1st April, 2008.

6.4.2

The total decontrol of urea distribution was deferred initially for a period of six months w.e.f. 1.4.2004 i.e., up to Kharif 2004, which has been subsequently deferred up to Rabi 2005-06 i.e., up to 31.3.2006. The existing system of 50% ECA allocation and 50% outside ECA allocation has been extended upto 31-3-2010. The pricing policy for urea units for Stage-III of New Pricing Schemes (NPS) which is effective from 1.10.2006 to 31.3.2010 has been formulated keeping in view the recommendations of the Working Group set up under the Chairmanship of Dr. Y.K. Alagh. The salient features of the proposed StageIII Policy which is aimed at promoting further investment in the urea sector, are to maximize urea production from the Urea units including through conversion of non-gas based Units to gas, incentivising additional urea production and encourage investment in Joint Venture (JV) projects abroad. It is also aimed at establishing a more efficient urea distribution and movement system in order to ensure availability of urea in the remotest corners of the country. The Stage-III policy seeks to promote usage of most efficient and comparatively cheaper feed stock natural gas/LNG for production of urea in the country. The policy lays down a definite plan for conversion of all non-gas based urea units to gas. At present, there are 8 urea units (MFL,SPIC, ZIL, MCFL, GNFC, NFL-Nangal, NFL-Bhatinda, NFLPanipat) in the country which are based on naphtha or FO/LSHS as feed stock. All these 8 units are required to switch over to natural gas/LNG within a period of next three years. Beyond this time limit, the high cost urea produced by these non-gas based units will not be entitled to subsidy at the existing levels and it will be restricted to import parity price of urea. The units, which are unable to tie up gas will have to explore alternative feedstocks like Coal Bed Methane (CBM) and coal gas. SFC has started using gas w.e.f. 22.9.2007.

6.4.3

II.

III.

6.4.4

6.4 6.4.1

Phased Decontrol of Urea Distribution As per the New Pricing Scheme for urea units, it was also envisaged that decontrol of urea distribution/movement will be carried out in a phased manner. During Stage-I, i.e. from 1.4.2003 to 31.3.2004, the allocation of urea under the Essential Commodities Act 1955 (ECA) was restricted up to 75% and 50% of installed capacity (as reassessed) of each unit in Kharif 2003 and Rabi 2003-04, respectively. It was further envisaged that during Stage-II commencing from 1.4.2004, urea distribution will be totally decontrolled after evaluation of Stage-I and with the concurrence of the Ministry of Agriculture.

28

6.4.5

The availability of gas is critical to the growth of urea industry in the country. Presently, the indigenous availability is not sufficient to meet the demand of existing gas based urea units in the country. To this end, the Department of Fertilizers constituted a Committee under the chairmanship of Secretary(P&NG) with Secretary(Fertilizers), Secretary(Expenditure), Secretary(Planning Commission) as its members to deliberate upon various issues relating to connectivity and assured supply of gas to the fertilizer sector. The Committee will also develop an appropriate mechanism for fixing the price of the gas in a transparent manner. It is expected that the availability of gas in the country will improve from 2008-09 onwards and the new policy, taking into account the above fact, has laid down specific timelines for conversion of all non-gas based units in the country to gas. In order to incentivise conversion of non gas based units to gas, the policy provides for a regime where there will be no mopping up of energy efficiency for a fixed period of five years for naphtha based as well as FO/LSHS based units. The policy also recognizes the comparative higher cost of conversion of FO/ LSHS based units to gas and provides for one time capital investment assistance to these units for conversion to gas during the next three years. A specific policy to this effect has been announced by the Government on 6th March 2009. The policy also lays down a formulation to dis-incentivise high cost production from the non-gas based units and to facilitate their early conversion to gas. It is proposed that these units may be allowed to produce 100% of capacity should they adhere to an agreed timetable for conversion to Gas and tie up requisite Gas/CBM/Coal gas. If they do not, they will be given only 75% of the fixed costs beyond 93% of capacity utilization in the 1st year (1.4.2007) and 50% of the fixed cost beyond 93% capacity utilization from 2nd year (1.4.2008) onwards.

6.4.8

6.4.6

6.4.7

Considering the likely growth in consumption of urea in the years to come, the policy seeks to encourage the existing urea units to produce beyond 100% of their installed capacities by introducing a system of incentives for additional urea production subject to merit order procurement. The policy of requiring prior Government permission for additional urea production has been dispensed with. All production between 100% and 110% of the existing reassessed capacity will be incentivised on the existing net gain sharing formula between the Government and the unit in the ratio of 65:35 respectively with the proviso that the total amount paid to the units after including the component of variable cost will be capped at the units own concession rate. The units increasing production beyond 110% will be compensated at their concession rate subject to the over all cap of Import Parity Price (IPP). To the extent Government does not require any quantities of additional production, the urea companies would be free to dispose of the remaining quantities by way of export or sale to complex manufacturers without any permission. The policy also encourages setting up of Joint Venture projects abroad where gas is readily available at reasonable prices. It recognizes our heavy dependence on imported raw materials/intermediates and feedstock in the fertilizer sector and to properly leverage this position, the policy seeks to create specialized agency to coordinate investments abroad in fertilizer sector. The policy seeks to rationalize distribution and movement of urea and the system of freight reimbursement with the objective of ensuring availability of urea in all parts of the country. The Government will continue to regulate movement of urea up to 50% of production depending upon the exigency of the situation. The State Governments will be required to allocate the entire quantity of planned urea arrivals including both regulated and de-regulated urea in districtwise, monthwise and supplierwise format. The

6.4.9

29

units will be required to maintain a district level stock point and the subsidy will be paid only when the urea reaches the district. The monitoring of movement and distribution of urea throughout the country up to the district level will be done by an On line Web based monitoring system. To facilitate movement of fertilizers to far flung area, the reimbursement of freight will be based on actual leads for rail and road movement. The rail freight will be reimbursed as per the actual expenditure and the road freight will be escalated as per composite road transport index every year. One time enhancement of 33% will be granted on the road component of primary freight to offset the impact of Supreme Court directive regarding maximum truck load limit of 9 MT on road vehicles. The existing special freight subsidy scheme will continue for supply of urea to the North Eastern States except Assam and Jammu & Kashmir. In addition, the Department will operate a buffer stock through the state institutional agencies/fertilizer companies in major urea consuming States up to a limit of 5% of the seasonal requirement. 6.4.10 Further to ensure availability of fertilizer in all parts of the country, the freight regime on all subsidized fertilizers including urea has been revised with effective from 1st April, 2008 through Uniform Pricing Policy for freight subsidy. Under the new policy the rail freight will be paid at actuals whereas the road freight will be based on normated district lead worked out from the nearest rail rake point for each district in the country and normative per Km rate recommended by Tariff Commission. 6.4.11 The Stage-III of NPS seeks to carry on the existing 6 group classification of urea manufacturing units in the country with updation of all costs upto 31st March, 2003. The respective pre-set energy consumption norm of each urea units during Stage-II of NPS or the actual energy consumption achieved during the year 2003, whichever is lower, will be recognized as the norm for

Stage-III of NPS. The policy also provides for updation of costs on account of cost of bags through 3 year moving weighted average cost of bags to compensate for the rise in prices for the last three years. It also provides for payment of sales tax on input and other taxes recognized under erstwhile Retention Price Scheme, on actual basis. 6.4.12 NPS Stage-III seeks to take forward the principles of uniformity and efficiency in urea production as enunciated during Stage I and II of NPS and also aims at bringing in more transparency in distribution of fertilizers across the country. The policy will encourage increase in indigenous production from the existing urea units in the country and facilitate early conversion of non-gas based units to gas leading to substantial savings in subsidy. The launch of Fertilizer Monitoring System (FMS) to monitor movement of fertilizers upto district level and the freight rationalization proposed in the new policy, the distribution of fertilizers in remote corners of the country will improve considerably without any complaints of shortages in future. The Department of Fertilizers will continue its endeavour to promote the growth of fertilizer industry in the country and ensure adequate availability of fertilizers to the farmers. 6.4.13 The tenure of New Pricing Scheme (StageIII) policy was upto 31-03-2010. The provisions of Policy for Stage-III of NPS has been extended till further orders on provisional basis. The formulation of New Pricing policy commencing from 1.4.2010 is under consideration of the Government. 6.5 Formulation of policy for existing urea beyond Stage-III of New Pricing Scheme A Group of Minister (GoM) constituted to review the fertilizer policy has decided in the meeting held on 5th January 2011 to set up a Committee under the Chairmanship of Shri Saumitra Chaudhuri, Member, Planning Commission to examine the proposal for introduction of Nutrient Based Subsidy

30

(NBS) in urea and to make suitable recommendations. 6.6 6.6.1 Pricing Policy for Investment in Fertilizer sector A pricing policy was announced on 29.1.2004 for setting up new urea projects and expansion of existing urea projects for augmenting the domestic production capacity of urea to meet the growing demand for enhancing the agricultural production in the country. The new policy aimed at enabling the entrepreneurs to decide about their investment plans in the fertilizer sector. The new policy was expected to encourage setting up of plants with international efficiency standards for fresh investment in new projects and expansion of existing units. The policy was based on the principle of Long Run Average Cost (LRAC). The above policy was not successful in attracting investment in this sector. The nonavailability of natural gas, which is the critical feedstock for production of urea, has also been one of the major constraints in further addition of indigenous capacity for production of urea. However with the projected improved availability of gas from 2009 onwards, it is expected that investment in fertilizer sector will also take place. The Government has recently announced on 4th September 2008, a new investment policy for urea sector to attract the much required investment in this sector. The policy is based on IPP benchmark and has been finalized in consultation with the industry. The policy is expected to lead to savings to the Government in the form of availability of Urea at a price below IPP and will also lead to indirect savings by bringing down the import price due to reduction in imports. The New Investment Policy aims at revamp, expansion, revival of existing urea units and setting up of Greenfield/ Brownfield projects. The policy is likely to substantially bridge the gap in next five years between the consumption and domestic production

subject to confirmed and adequate availability of gas at reasonable prices. The salient features of the new investment policy are as under :1. The policy is based on Import Parity Price (IPP) benchmarked with suitable floor and ceiling prices of USD 250/MT and USD 425/MT respectively. Revamp project: Any improvement in capacity of existing plants through investment upto Rs. 1000 crore, in the existing train of ammonia-urea production will be treated as revamp of existing units. The additional urea from the revamp of existing units will be recognized at 85% of IPP with the floor and ceiling price as indicated above. Expansion projects: Setting up of a new ammonia-urea plant (a separate new ammonia-urea train) in the premises of the existing fertilizer plants, utilizing some of the common utilities will qualify for being treated as expansion project. The investment should exceed a minimum limit of Rs.3000 crore. The urea from the expansion of existing units will be recognized at 90% of IPP, with the floor and ceiling price as indicated above. Revival/Brownfield projects: The urea from the revived units of Hindustan Fertilizer Corporation Limited(HFCL) and Fertilizer Corporation of India Limited (FCIL) will be recognized at 95% of IPP with prescribed floor & ceiling price, if the revival of closed units takes placed in public sector. Greenfield projects: The pricing of Greenfield projects will be decided based on a bidding process which will be for a discount over IPP, after firming up of the location (States) of the proposed new plants. Gas transportation charges: An additional gas transportation cost will be

2.

3.

6.6.2

4.

6.6.3

5.

6.

31

paid to units undertaking expansion and revival on the basis of actuals (upto 5.2 Gcal per MT of urea) as decided by the Regulator(Gas) subject to a maximum ceiling of USD 25 per MT of urea. 7. Allocation of Gas: Only non-APM gas will be considered for the new investment in urea sector. Coal gasification based Urea Projects: The Coal gasification based urea projects will also be treated on par with a revival or a Greenfield project as the case may be. In addition, any other incentives or tax benefits as provided by Government for encouraging coal gasification technology will also be extended to these projects. Joint Ventures abroad: The Joint Venture projects abroad in gas rich countries are also proposed to be encouraged through firm offtake contracts with pricing decided on the basis of prevailing market conditions and in mutual consultation with the joint venture company. However, the principle for deciding upon the maximum price will be the price achieved under Greenfield projects or 95% of IPP as proposed for revival projects (in absence of any Greenfield projects) with a cap of USD 405 CIF India per MT and a floor of USD 225 CIF India per MT (inclusive of handling and bagging costs) 6.6.4

does not come through within the stipulated time period, such brownfield projects will be treated similar to a Greenfield projects wherein price will be decided through limited bidding options. The time period for setting up of new Joint Ventures would also be five years under the new investment policy. The fertilizer Industry has responded positively towards the New Investment Policy by initiating investment decision for revamp of existing capacities. The fertilizer units like IFFCO-Aonla I & II, IFFCO-Phulpur I & II, Chambal Fertilizers and Chemicals Limited (CFCL) Gadepan I&II, Nagarjuna Fertilizers and Chemicals Limited (NFCL) Kakinada I & II and the unit of Tata Chemicals Limited - Babrala have informed regarding availability of additional production of urea after revamp. Further, RCF, Thal; KRIBHCO- Hazira and NFL, Vijaipur have undertaken revamp of their units. The companies have been regularly requesting the Government for either firm allocation of gas at predetermined fixed prices from domestic gas sources or insulate industry from any additional liability arising due to increase in delivered price of gas by correspondingly increasing the floor prices and in the absence of commitment on allocation of natural gas at fixed prices. The investment decisions exceeding Rs.30,000 crore are under hold. The revival and closed plants is not envisaged in public sector and bidding is not a feasible option in Green Field investment. Keeping in view the above constraint expressed by the fertilizer industry regarding pricing policy and firm availability of gas, the EGOM has decided that the demand emanating beyond 2008-09 from debottlenecking of the expansion of fertilizer plants, conversion of naphtha-based and fuel oil-based fertilizer plants, and revival of closed fertilizer plants would be given the highest priority and they would be supplied natural gas as and when they are ready to utilize the gas. To address the issue of

8.

9.

6.6.5

10. Time period for proposed investment policy: Only those revamp projects which start production of additional capacities within four years of notification of the new policy would qualify for the dispensation recommended above. Similarly production from expansion and revival (brownfield) units that come about within five years of notification of the new policy would qualify for dispensation provided in the policy. If the production

32

uncertainty in gas price, a proposal for amendments in the New Investment Policy notified on 4th September 2008 is under consideration of Department of Fertilizers. 6.7 Policy for encouraging production and availability of fortified and coated fertilizers in the country Department of Fertilizers has notified on 2nd June 2008 a policy for encouraging production and availability of fortified and coated fertilizers in the country. In terms of this policy, the indigenous manufacturers/ producers of the subsidized fertilizers are allowed to produce fortified/coated subsidized fertilizers up to a maximum of 20% of their total production of respective subsidized fertilizers. The manufacturers/producers are allowed to sell all the FCO approved fortified/ coated subsidized fertilizers, except for Zincated Urea and Boronated SSP at a price up to 5% above the MRP of the subsidized fertilizer as indicated in the table above. For Zincated Urea and Boronated SSP, the manufacturers are allowed to charge up to 10% above MRP of Urea and SSP respectively. With effect from 11th January 2011, the indigenous manufacturers/producers of urea are allowed to produce Neem Coated urea which has been incorporated in Schedule 1 of the Fertilizer Control Order, 1985, up to a maximum of 35% of their total production of respective subsidized fertilizers. The ceiling of production of Neem Coated urea has been increased from the existing limit of 20% to a maximum of 35% of their total production of respective subsidized fertilizers. The production of Neem Coasted Urea will be taken as company wise and not plant/unit wise. The fertilizer companies will also be required to submit a certificate from the statutory auditors regarding total production of Neem Coated Urea as against the total production of subsidized fertilizer to indicate the adherence to the ceiling of 35% as indicated above.

6.8

Policy for Uniform freight subsidy on all fertilizers under the fertilizer subsidy regime To ensure easy availability of fertilizers in all parts of the country, the Department of Fertilizers has notified on 17th July 2008 a uniform freight subsidy regime for all subsidized fertilizers, wherein freight subsidy will be paid separately on receipt of all subsidized fertilizers in the districts/blocks. The freight subsidy will constitute of two components, namely, rail freight and road freight. The rail freight will be paid on actual, and the road freight will be paid on a normative average district lead (average of the actual leads of block headquarters from the nearest rail rake point) and a normative per KM rate. The uniform freight subsidy regime will facilitate availability of fertilizers in all parts of the country, especially in areas which are far from the production facilities and ports by reimbursing freight on actual. Concession scheme/nutrient based subsidy policy for decontrolled phosphatic & potassic fertilizers Background

6.8.1

6.7.1

6.8.2

6.9

6.7.2

6.9.1. Government of India decontrolled Phosphatic and Potassic (P&K) fertilizers with effect from 25th August 1992 on the recommendations of Joint Parliamentary Committee. Consequent upon the decontrol, the prices of the Phosphatic & Potassic fertilizers registered a sharp increase in the market, which exercised an adverse impact on the demand and consumption of the same. It led to an imbalance in the usage of the nutrients of N, P & K (Nitrogen, Phosphate and Potash) and the productivity of the soil. Keeping in view the adverse impact of the decontrol of the P&K fertilizers, Department of Agriculture & Cooperation introduced Concession Scheme for decontrolled Phosphatic & Potassic (P&K) fertilizers on ad-hoc basis w.e.f. 1.10.1992, which has

33

been allowed to continue by the Government of India upto 31.3.2010 with changed parameters from time to time. Then the Government introduced Nutrient Based Subsidy Policy w.e.f. 1.4.2010 (w.e.f. 1.5.2010 for SSP) in continuation of the erstwhile Concession Scheme for decontrolled P & K fertilizers. The basic purpose of the Concession Scheme and Nutrient Based Subsidy Policy has been to provide fertilizers to the farmers at the subsidized prices. Initially, the ad-hoc Concession Scheme was introduced for subsidy on DAP, MOP, NPK Complex fertilizers. This scheme was also extended to SSP from 1993-94. Concession was disbursed to the manufacturers/importers by the State Governments during 1992-93 and 1993-94 based on the grants provided by Department of Agriculture & Cooperation. Subsequently, DAC started releasing payment of concession to the fertilizer companies based on the certificate of sales issued by the State Governments on 100% basis. The Government introduced the system of releasing 80% On Account payment of concession in 1997-98 to the fertilizer companies month-wise, which was finally settled based on the certificate of sales issued by the State Government. During 1997-98, Department of Agriculture & Cooperation also started indicating an all India uniform Maximum Retail Price (MRP) for DAP/NPK/MOP. The responsibility of indicating MRP in respect of SSP rested with the State Governments. The Special Freight Subsidy Reimbursement Scheme was also introduced in 1997 for supply of fertilizers in the difficult areas of J&K and North-eastern States, which continued upto 31.3.2008. Based on the cost price study of DAP and MOP conducted by Bureau of Industrial Costs & Prices (BICP - now called Tariff Commission), Department of Agriculture & Cooperation started announcing rates of concession based on the cost plus approach on quarterly basis w.e.f. 1.4.1999. The total delivered cost of fertilizers being invariably higher than the MRP indicated by the

Government, the difference in the delivered price of fertilizers at the farm gate and the MRP was compensated by the Government as subsidy to the manufacturers/importers for selling the fertilizers at the MRP indicated by the Government. The administration of the scheme was transferred from Department of Agriculture & Cooperation to Department of Fertilizers w.e.f. 1.10.2000. The Government introduced a new methodology for working out subsidy to complex fertilizers w.e.f. 1.4.2002 based on the recommendations of the Tariff Commission. The complex manufacturers were divided into groups based on feedstock for sourcing Nitrogen, such as gas, naphtha, imported ammonia. With the passage of time, the structure of DAP industry also changed as some of the new DAP manufacturing plants were established using the Rock Phosphate for manufacturing indigenous Phosphoric acid/DAP. Accordingly, the Tariff Commission made a fresh Cost Price Study and submitted its report in February 2003. Payment of concession to the DAP manufacturing units from 2003-04 to 2007-08 was made as per two groups depending upon the source of the raw materials (Rock Phosphate/ Phosphoric acid). Based on the decisions of the Government in 2004-05, Department of Fertilizers framed a proposal suggesting methodology to link phosphoric acid price with international DAP price. Subsequently, the matter was referred to the Expert Group. The Expert Group under Prof. Abhijit Sen, submitted its report in October 2005. The recommendations of the Expert Group were considered by an Inter-Ministerial Group (IMG). Tariff Commission conducted fresh cost price study of DAP/MOP and NPK complexes and submitted its report in December 2007. Based on the examination of the Tariff Commission Report and the longterm approach suggested by the Expert Group under the Chairmanship of Prof. Abhijit Sen, the Government approved the Concession Scheme with effect from 1.4.2008 for DAP/MOP/NPK Complexes/ MAP, which continued upto 31.3.2010 with

34

certain modifications. The final rates of concession were worked out on monthly basis. Concession for indigenous DAP was the same as that of imported DAP (on the basis of import parity price). Concession on complex fertilizers was based on the methodology recommended by Tariff Commission with certain modifications. The NPK complex industry was divided into 4 groups, depending upon the source of Nitrogen, vis--vis, gas, naphtha, imported Urea-ammonia mixture and imported Ammonia. A separate cost of S for Sulphur containing complex fertilizers was recognized w.e.f. 1.4.2008. The input/fertilizer prices for Concession Scheme was derived on the basis of an outlier methodology. The Buffer Stocking Scheme was allowed to continue with 3.5 Lakh MTs for DAP and 1 Lakh MTs for MOP as buffer. Modifications in certain elements of the Concession Scheme were also carried out with effect from 1.4.2009 to adjust parameters of concession scheme to International pricing dynamics and rationalize N pricing group-wise as well as payment system. Certain changes were effected in the existing policy for P &K Fertilizers. Accordingly, w.e.f. 1.4.2009 final rates of concession were worked out on monthly basis, taking into account the average international price of the month preceding the last month or the actual weighted average C&F landed price at the Indian ports for the current month, whichever lower with respect to DAP and MOP. In case of raw materials/ inputs for complex fertilizers, there was a lag of one month. From 1.12.2008, payment of concession has been made to the manufacturers/importers of the Decontrolled fertilizers (except SSP) on the basis of arrival/ receipt of fertilizers and certificate of receipt by the State Government/statutory auditor of the company subject to final settlement on the basis of sale of the quantity. The MRPs of the P&K fertilizers, which has been indicated by the Government/State Government, has been constant since 2002 till 31.3.2010. The MRPs of the NPK complexes were reduced w.e.f. 18.6.2008.

In order to enhance the basket of fertilizers in the Concession Scheme, MonoAmmonium Phosphate (MAP) was included into the Concession Scheme w.e.f. 1.4.2007, Triple Super Phosphate (TSP) was inducted into the Concession Scheme w.e.f. 1.4.2008 and Ammonium Sulphate (AS) manufactured by M/s FACT and M/s GSFC was inducted w.e.f. 1.7.2008. The rates of concession during 2009-10 under the Concession Scheme for decontrolled P & K fertilizers (except SSP) were as per Annexure-X. 6.9.2 (A) Nutrient Based Subsidy Policy for decontrolled Phosphatic & Potassic fertilizers In the implementation of Concession Scheme, it has been experienced that no investment has taken place in last decade. The subsidy outgo increased exponentially by 530% during 2004 to 2009 with about 90% of the increase due to rise in the international prices of fertilizers and inputs. Agricultural productivity did not register increase in commensurate with the increase in the subsidy bill. The MRP of the fertilizers remained constant from 2002 onwards. A Group of Ministers (GoM) constituted to look into all aspects of the fertilizer regime, recommended that Nutrient Based Subsidy (NBS) may be introduced based on the contents of the nutrients in the subsidized fertilizers. The Honble Finance Minister in its Budget Speech 2009 announced for introduction of Nutrient Based Subsidy Policy for Phosphatic & Potassic fertilizers with the objective of ensuring Nations food security, improving agricultural productivity and ensuring the balanced application of fertilizers. The Government introduced the Nutrient Based Subsidy (NBS) Policy w.e.f. 1.4.2010 in continuation of the erstwhile Concession Scheme for decontrolled P & K fertilizers (w.e.f. 1.5.2010 for SSP). The details of Nutrient Based Subsidy Policy are as under: (i) NBS is applicable for Di Ammonium Phosphate (DAP, 18-46-0), Muriate of

35

Potash (MOP), Mono Ammonium Phosphate (MAP, 11-52-0), Triple Super Phosphate (TSP, 0-46-0), 12 grades of complex fertilizers and Ammonium Sulphate (AS - (Caprolactum grade by GSFC and FACT), which were covered under the earlier Concession Scheme for Phosphatic and Potassic (P&K) fertilizers up to 31st March 2010 and Single Super Phosphate (SSP). Primary nutrients, namely Nitrogen N, Phosphate P and Potash K and nutrient Sulphur S contained in the fertilizers mentioned above are eligible for NBS. (ii) Any variant of the fertilizers mentioned above with secondary and micronutrients (except Sulphur S), as provided for under FCO, is also eligible for subsidy. The secondary and micronutrients (except S) in such fertilizers attracts a separate per tonne subsidy to encourage their application along with primary nutrients.

(iv) NBS to be paid annually on each nutrient namely, N, P, K and S has been decided by the Government for 2010-11 on recommendation of IMC. For 2010-11, per kg NBS and per tonne NBS for each subsidized fertilizer w.e.f 1st April 2010 has been announced. (v) Distribution and movement of fertilizers along with import of finished fertilizers, fertilizer inputs and production by indigenous units continues to be monitored through the online web based Fertilizer Monitoring System (FMS) as being done under the outgoing Concession Scheme for P&K fertilizers.

(vi) 20% of the price decontrolled fertilizers produced/imported in India is now in the movement control under the Essential Commodities Act 1955 (ECA). Department of Fertilizers will regulate the movement of these fertilizers to bridge the supplies in under-served areas. (vii) In addition to NBS, freight for the movement and distribution of the decontrolled fertilizers by rail and road is being provided to enable wider availability of fertilizers in the country. (viii) Import of all the subsidized P&K fertilizers, including 13 grades of complex fertilizers has been placed under Open General License (OGL). Earlier, no concession was available for imported complex fertilizers. Now, NBS is available for imported complex fertilizers also. However, subsidy will not be applicable on imported Ammonium Sulphate (AS), as NBS is applicable only to Ammonium Sulphate produced by FACT and GSFC, both Public Sector entities. Import of Urea is canalized during the first phase of NBS Policy and Urea continues under Government control. MRP of Urea has been increased by 10% w.e.f. 1.4.2010 and is 5310 PMT.

(iii) An Inter-Ministerial Committee (IMC) has been constituted with Secretary (Fertilizers) as Chairperson and Joint Secretary level representatives of Department of Agriculture & Cooperation (DAC), Department of Expenditure (DOE), Planning Commission and Department of Agricultural Research and Education (DARE). This Committee recommends per nutrient subsidy for N, P, K and S before the start of the financial year for decision by the Government (Department of Fertilizers). The IMC also recommends a per tonne additional subsidy on fortified subsidized fertilizers carrying secondary (other than S) and micro- nutrients. The Committee considers and recommends inclusion of new fertilizers under the subsidy regime based on application of manufacturers/ importers and its need appraisal by the Indian Council for Agricultural Research (ICAR), for decision by the Government.

36

(ix) Though the market price of subsidized fertilizers, except Urea is determined based on demand-supply balance, the fertilizer companies are required to print Maximum Retail Price (MRP) along with applicable subsidy on the fertilizer bags clearly. Any sale above the printed net MRP is punishable under the EC Act. (x) Manufacturers of customized fertilizers and mixture fertilizers are eligible to source subsidized fertilizers from the manufacturers/ importers after their receipt in the districts as inputs for manufacturing customized fertilizers and mixture fertilizers for agricultural purpose. There is no separate subsidy on sale of customized fertilizers and mixture fertilizers.

Potash and Sulphur) and the amount of subsidy per MT on the Phosphatic & Potassic fertilizers for 2010-11 and 2011-12 is as follows:
(Amount in ) Sl. No. Nutrients NBS per Kg of nutrient (2010-11) From From 1.4.2010 to 1.1.2011 to 31.12.2010 31.3.2011 1. 2. 3. 4. N P K S 23.227 26.276 24.487 1.784 23.227 25.624 23.987 1.784 NBS per Kg of nutrient (2011-12)

20.111 20.304 21.386 1.175

(C)

The Per MT Nutrient Based Subsidy during 2010-11 and 2011-12 is as follows:
(Amount in PMT) Nutrient Based Subsidy per MT (2010-11) From 1.4.2010 to 31.12.2010 From 1.1.2011 to 31.3.2011 15968 15879 11787 14392 9073 10002 11236 15222 14825 13785 15578 10926 9770 13678 12383 13839 11654 Nutrient Based Subsidy per MT (2011-12) 12960 12770 9340 12831 7431 8236 9295 12850 12332 11495 12916 9270 8083 11316 10506 11742

(xi) A separate additional subsidy is provided to the indigenous manufacturers producing complex fertilizers using Naphtha based captive Ammonia to compensate for the higher cost of production of N. However, this will be for a maximum period of two years during which the units will have to convert to gas or use imported Ammonia. The quantum of additional subsidy will be finalized by Department of Fertilizers in consultation with DOE, based on study and recommendations by the Tariff Commission. (xii) The NBS is being released through the industry during the first phase. The payment of NBS to the manufacturers/ importers of DAP/MOP/Complex Fertilizers/ MAP/TSP, SSP and AS is released as per the procedure notified by the Department. (B) Nutrient Based Subsidy Per Kilo Gram of Nutrients Based on the recommendations of the Inter Ministerial Committee constituted under the Nutrient Based Subsidy Policy, the Government has allowed the per Kg NBS for N, P, K & S (Nitrogen, Phosphate,

Fertilizers

DAP MAP TSP MOP 16-20-0-13 20-20-0-13 23-23-0-0 10-26-26-0 12-32-16-0 14-28-14-0 14-35-14-0 15-15-15-0 20-20-0-0 28-28-0-0 17-17-17-0 19-19-19-0 16-16-16-0

16268 16219 12087 14692 9203 10133 11386 15521 15114 14037 15877 11099 9901 13861 12578 14058 11838 (w.e.f. 1.7.2010 inducted into NBS on 6.8.2010) 5195 4400

Ammonium Sulphate SSP

5195 4296

4413 3378

37

(D)

Department of Fertilizers has also provided additional subsidy on the NPK complex fertilizers based on Naphtha/ Furnace Oil for Nitrogen for a period of two years w.e.f. 1.4.2010 as follows:
Grades of Fertilizers Amount of additional compensation (provisional) in per MT 2331

Name of the Company

FACT (Cochin)

20-20-0-13 (APS) (Udyogmandal and Cochin) Ammonium Sulphate (20.6-0-0-13) (Udyogmandal)

2792

MFL, Manali

20-20-0-13 (APS) 17-17-17-0

4784 4079 1914

as the statutory auditor of the company. The State Governments are required to submit certificate to DOF in receipt of the fertilizers in prescribed Proforma B. The payment of subsidy to SSP is released on sales basis. Accordingly, the eligible units are allowed to claim 85% On Account payment of subsidy based on the information in respect of sale of SSP duly certified by the authorized signatory as well as the statutory auditor of the company. The balance payment is released by DOF based on the certification of sales issued by the State Governments in prescribed Proforma B. At present, 38 manufacturers/importers of P&K fertilizers and 82 SSP manufacturers are covered under the Nutrient Based Subsidy Policy. (G) Freight under NBS In addition to NBS, freight for the movement and distribution of the decontrolled fertilizers by rail and road is being provided to enable wider availability of fertilizers in the country. Subsidy under the NBS on decontrolled P & K fertilizers (except SSP) is being paid as per the actual claim. Under the Nutrient Based Subsidy Policy, the manufacturers/ importers (except SSP) have been allowed to claim freight from 1.4.2010 to 31.12.2010, based on the railway receipts, which includes an amount of 300 for secondary movement. Secondary movement freight has also been allowed to the SSP manufacturers. Freight subsidy under Nutrient Based Subsidy for rail movement has been allowed as per actual claim w.e.f. 1.1.2011 for 2010-11 and accordingly, the rates of subsidy has been revised w.e.f. 1.1.2011. A lumpsum freight of 200 PMT has also been allowed for SSP. The secondary freight on P&K fertilizers (except SSP) will be paid in line with the Uniform Freight Subsidy Policy w.e.f. 1.1.2011 as applicable in Urea. The freight for direct road movement from plant or port (primary movement) would be subject to lower of actual claim and equivalent rail freight upto a maximum distance of 700 Kms w.e.f. 1.1.2011.

GNVFC, Bharuch

20-20-0-0 (ANP)

(E)

Subsidy for fortified fertilizers Per MT additional subsidy for fortified fertilizers with secondary and micro-nutrients as per FCO has also been allowed under NBS as follows:

Sl. No. 1. 2.

Nutrients for fortification as per FCO Boron Bn Zinc Zn

Additional subsidy per MT of fortified fertilizers () 300 500

(F)

Procedure for Payment of subsidy under NBS: Department of Fertilizers releases 85% (90% with Bank Guarantee) On Account payment of subsidy month-wise to the manufacturers/ importers of P&K fertilizers (SSP) based on receipt of fertilizers in the districts/States. The manufacturers/importers claim the On Account payment in prescribed Proforma A duly certified by the authorized signatory as well as the statutory auditor of the company. The balance payment of subsidy is also claimed by the fertilizer companies based on information in prescribed Proforma D duly certified by the authorized signatory as well

38

(H) (i)

Impact of Nutrient Based Subsidy MRP of fertilizers under Nutrient Based Subsidy : The MRP of fertilizer, which was indicated by the Government and has been constant since 2002, has now been decontrolled w.e.f. 1.4.2010 under the Nutrient Based Subsidy Policy. However, the Government has decided to fix subsidy in such a manner that the MRP of the fertilizer does not affect the farmers adversely. Accordingly, the MRP of P&K fertilizers has registered an increase of 30 per bag. The MRP of SSP has reduced by 70 per bag. The MRP of the other P&K fertilizers has registered a minor increase under the NBS. It has been observed that the farmers have to pay only 25-40% of the actual cost of fertilizers. The MRP and subsidy released under the NBS during 201011 has been as at Annexure-XI.

6.9.4

Subsidy Released The amount of subsidy provided by the Government during 2001-02 was 12695.02 crore, which has increased upto 99494.71 crore in 2008-09. It was 64032.29 crore during 2009-10. The budget estimate for fertilizer subsidy for 2010-11 is 52840.73 crore. A statement showing subsidy released Department of Fertilizers on urea and P&K fertilizers is at Annexure-XII.

6.6.5

Cost Price Study by Tariff Commission In order to update/finalize provisional rates of subsidy for Ammonium Sulphate and Naphtha based NPK complex fertilizer, Tariff Commission has been requested to undertake Cost Price Study and give its recommendations. The Government is also considering the report of the Tariff Commission in respect of freight subsidy from plant/ports to the districts.

6.9.3. Direct Subsidy to the farmers under NBS : Under the present subsidy regime, fertilizers are provided to the farmers at the Maximum Retail Price, which is much below the actual cost of fertilizers. Accordingly, the farmers pay 25-40% of the actual cost of fertilizers and rest of the cost is borne by the Government. In the first phase of Nutrient Based Subsidy policy, the subsidy is released through the fertilizer industry (manufacturer/ marketer/importers). With respect to examination of the feasibility of disbursing subsidy directly to the farmers, Department of Fertilizers is appointing a consultant for implementation of proof of concept (pilot) study for examining the feasibility of implementation of tracking of fertilizers to the farm gate level and also of examining the feasibility of disbursement of subsidy direct to the retailer (farm gate/farmer). The proof of concept is proposed to be held in 7 States viz. Haryana, Andhra Pradesh, Tamil Nadu, Rajasthan, Madhya Pradesh, Assam and Maharashtra in approximately 50-70 blocks.

6.9.6

Quality of Fertilizers Government of India has declared fertilizer as an essential commodity under the Essential Commodities Act, 1955 (ECA) and has notified Fertilizer Control Order, 1985 (FCO) under this Act. Accordingly, it is the responsibility of the State Governments to ensure the supply of quality of fertilizers by the manufacturers/importers of fertilizers as prescribed under the FCO under the ECA. As per the provision of the FCO, the fertilizers, which meet the standard of quality laid down in the order can only be sold to the farmers. There are 71 fertilizer testing laboratories including four laboratories of the Government of India at Faridabad, Kalyani, Mumbai and Chennai with an annual analyzing capacity of 1.34 lakh samples. The quality of the fertilizers imported in the Country is invariably checked by the fertilizer quality control laboratories of the Government of India. The State Governments are adequately empowered to draw samples of the fertilizers anywhere in the Country and take appropriate action against the sellers of

39

Non- Standard fertilizers. The penal provision includes prosecution of offenders and sentence if convicted up to seven years imprisonment under the ECA, 1955 besides cancellation of authorization certificate and other administrative action. The Department of Fertilizers make deductions alongwith penal interest on the quantity of the fertilizers for which the State Governments have reported to be Non- Standard. During the year 2006-07, 2007-08 and 2008-09, the percentage of samples of fertilizers declared Non- Standard at all India level were 6.0%, 6.2% and 5.5% respectively. Payment of concession for P&K fertilizers and for Single Super Phosphate (SSP) is made by the Department taking into account the certificate of quality given by the respective State Governments in Proforma B for the fertilizers received and sold in the State. Further, SSP units are required to produce month-wise Quality Certificates issued by the State Governments of the State in which the units are located. The units are required to have well equipped laboratory to test the sample of its SSP. The SSP units are also required to print Quality Certified on each bag released in the market. DOF also deputes PDIL to conduct first time technical inspection of the new SSP units. PDIL conducts six monthly inspections of the SSP units to check the quantity and quality of the fertilizers for which the units are claiming payment of subsidy. The units are also required to use only those grades of Rock Phosphate as inputs for manufacturing SSP under the NBS, which are notified by DOF from time to time. A statement showing the notified grades is at Annexure-XIII. DOF has also asked the State Government to constitute teams with that of PDIL to test samples of Single Super Phosphate (SSP) at the retailer level. The marketers of the SSP are also responsible for he quality of the fertilizer marketed by them. Department of Fertilizers has also constituted vigilance teams of the Officers of the Department to check the availability and quality of the fertilizers in the States.

6.9.7

Ban on Export of Fertilizer The Government has received complaints of smuggling of subsidized fertilizers to the neighboring countries. Keeping in view the availability of the fertilizers in the country and the subsidy paid thereon, in addition to urea, the Government has decided to put the export of DAP/MOP in the restrictive category in order to discourage the exports and smuggling. The DGFT has been requested to place all other subsidized fertilizers also in the restricted category.

6.9.8

Concession Scheme/Nutrient Based Subsidy for SSP After decontrol of P&K fertilizers, Concession Scheme for SSP was introduced w.e.f. 199394, which continued on ad-hoc basis for concession upto 30.4.2008. After the transfer of the administration of the Concession Scheme from Department of Agriculture & Cooperation to DOF w.e.f. October 2000, DOF revised the guidelines. Accordingly, a Technical Audit and Inspection Cell (TAC) under the aegis of PDIL was constituted vide guidelines dated 17.5.2001. The SSP manufacturers were required to use only those grades of Rock Phosphate, which has been notified by DOF from time to time, for claiming payment of concession. All the new SSP manufacturing units were required to undergo first time technical inspection of the units to ascertain their technical competence to manufacture SSP of the standards laid down under the FCO. Subsequently, the units were also required to undergo six monthly inspection to ascertain as to whether the units are working as per the tenets of the Concession Scheme. The units were allowed to claim 85% On Account payment of concession to be settled subsequently by DOF based on the certification of sales issued by the State Governments in prescribed Proforma B. This practice has also been allowed to continue till date though the other policy parameters for SSP have been changed from time to time. The Government revised Concession Scheme for

40

SSP w.e.f. 1.5.2008, which continued upto 30.9.2009. As per this policy, Department of Fertilizers announced All India MRP at ` 3400 PMT in place of the earlier system of indicating MRP by each State. As per the policy-dated 30.4.2008, the concession rates were announced month-wise separately for SSP based on the imported Rock Phosphate and that based on indigenous Rock Phosphate. The Concession was escalated/ de-escalated based on the rise/fall of the prices of the raw materials of Rock Phosphate, Sulphur and also the exchange rate. Then, DOF announced further revised policy on 13.8.2009 w.e.f. 1.10.2009, which continued upto 30.4.2010. As per this policy, the Government decided to leave the selling price of SSP open w.e.f. 1.10.2009 instead of the earlier MRP of ` 3400 PMT on all India basis. The Government provided adhoc concession for an amount of ` 2000 PMT for powdered, granulated and boronated SSP. Only those SSP manufacturers were allowed to claim subsidy, which produced 50% of the annual installed capacity or 40,000 MTs per annum. The system of releasing On Account as well as balance payment of concession continued as it was. Further, Nutrient Based Subsidy Policy has also been extended to SSP w.e.f. 1.5.2010. Accordingly, the criteria of capacity utilization has been continued for being eligible for

NBS. As per the NBS for 2010-11, the per Kg NBS for Phosphate and Sulphur is ` 26.276 and ` 1.784 respectively. Accordingly, subsidy for an amount of ` 4400 PMT has been announced for 2010-11. This amount has been revised w.e.f. 1.1.2011 and accordingly, subsidy for an amount of ` 4296 PMT has been allowed in addition to a lumpsum freight of ` 200 PMT. Additional per metric tonne subsidy for Boronated SSP has also been allowed for an amount of ` 300 PMT. Though the MRP of the SSP in the NBS has been decontrolled but this fertilizer has been sold by the manufacturers at ` 3200 PMT based on the MOU between the manufacturers and the Government during 2010-11. Per Kilogram NBS for Phosphate and Sulphur in the SSP has also been announced for 2010-11 for an amount of ` 25.624 and ` 1.784 respectively in addition to the lumpsum freight of ` 200 PMT. The subsidy for boronated SSP has been continued and the manufacturers of Boronated SSP are allowed to fix their MRP based on demand and supply forces. In order to ensure quality of SSP, the SSP manufacturers are required to produce a certificate of quality issued by the State Governments in which the units are located. The units are required to write/print Quality Certified on each bag of the SSP.

41

Chapter-7
Public Sector Undertaking and Cooperative Society There are nine public enterprises and one MultiState Cooperative Society namely Krishak Bharati Cooperative Limited (KRIBHCO) under the administrative control of the Department. A statement indicating profitability of these organizations has been given at Annexure-XIV. 7.1 7.1.1 FCI Aravali Gypsum & Minerals India Limited (FAGMIL) Introduction The FCI Aravali Gypsum and Minerals India Limited was incorporated under the Companies Act, 1956 as a Public Sector Undertaking on 14.02.2003 after being hived off the Jodhpur Mining Organisation (JMO) of Fertilizer Corporation of India Ltd. (FCIL). The authorized share capital of the Company is Rs.10 Crore and the paid up capital is Rs. 7,32,98,000/- as on 31-03-2010. 7.1.2 Production Performance During the year 2009-10 the company produced 7.23 LMT of Gypsum against the target of 7.65 LMT. During the current year 2010-11, the Company has produced 5.51 LMT of Gypsum up to December 2010 as against the revised annual target of 9.15 lakh MT. 7.1.3 Financial Performance During the year 2009-10 the company earned a profit before tax of Rs.15.88 crores on sales of Rs.45.61 crore. Upto December 2010 the company has earned a profit of Rs.8.58 crores before tax on the sales of Rs.35.11 crores. 7.1.4 Grievance Cell Grievance Cell is functioning to redress the public and staff grievances and no grievance is pending as on date. 2. (i) For Public grievance The Company has a well established public grievances cell to redress the grievances of public at Head Office at Jodhpur. The Grievance Cell disposes of public grievances promptly. (ii) For Staff Grievance 1. The employees who are working in various Mines are advised to submit their grievances through the respective Area Managers to General Manager. The employees working at Head Office, Jodhpur, route their grievances through Sectional Heads to General Manager. At present, no grievance is pending.

7.1.5

Employment of SC/ST, Ex-servicemen, Physically Handicapped & Other Backward Classes (OBCs) persons. Company has a total man-power of 97 as on 31.3.2010. Out of which, 13 are scheduled caste, 6 scheduled tribes, 1 Ex-servicemen and 7 are from OBC category.

7.1.6

Corporate Social Responsibility (CSR) FAGMIL has earmarked 2% of its profits before tax for providing assistance for public health and medical relief, education etc. and accordingly made a provision of Rs. 31.75 lakh (previous year Rs.27.92 lakh) in the books of accounts during the year 2009-10.

7.2 7.2.1

Brahmaputra Valley Fertilizer Corporation Limited (BVFCL) Introduction BVFCL is a public sector undertaking under the administrative control of the Department of Fertilizers (DOF) formed after segregation of Namrup units in Assam from Hindustan

42

Fertilizer Corporation Limited (HFCL) w.e.f. 1.4.2002. The Namrup Complex of BVFCL comprise of three separate units designated as Namrup-I, Namrup-II and Namrup-III. The raw material for all the three units is natural gas, both as feed stock and as fuel. NamrupI has only Ammonia plant whereas NamrupII & Namrup-III have Ammonia & Urea plants. Presently only Namrup-II and Namrup-III are in operation. The other establishments of the company are Liaison Offices at NOIDA & Kolkata and Marketing Offices at Guwahati, Siliguri & Patna. The authorized share capital and paid up capital of the company as on 31.03.2010 were Rs. 510 Crores and Rs. 365.83 Crores respectively. 7.2.2 Physical Performance During the year 2009-10 the company produced 2.30 LMT of Urea against the MOU target of 3.70 LMT due to frequent power failures, poor conversion in Synthesis converter and tube leakages in coolers. The performance of the company improved and the actual production increased to 1.93 LMT upto December 2010 against the annual MOU target of 3,26,860 MT of Urea. Performance of the Company, during 201011 has been greatly affected due to shortfall in NG supply from M/s OIL. Namrup-II plants remained under shutdown for most of the days during May 2010 to July 2010 due to limitation in NG supply. In Namrup-III

performance was affected due to poor conversion in Synthesis Converter and liner leakage of Urea reactor. Further Namrup-II Plant could run only at 50% load capacity due to availability of 1.72 MMSCMD gas against requirement of 1.95 MMSCMD of gas. This has increased energy consumption and cost of production of Namrup-II plants. The company manufactured 15.98 MT of Biofertilizer during the period April 2010 to December 2010 and plan to produce 20 MT Bio-fertilizer in 2010-11. The company has sold 235 MT Quality Seeds to farmers through its dealer network during Khariff 2010-11 and Order for 1991 MT seed has been placed with M/s State Farms Corporation of India Ltd., New Delhi for distribution during Rabi 2010-11. 464.71 MT of seeds has been received till Nov2010. The company has started production of Vermicompost and has sold 11.43 MT of vermin-compost till November 2010 during 2010-11. 7.2.3 Financial Performance During the year 2009-10 the company has incurred a net loss of Rs.133.23 crores out of total sales of Rs.231.46 crores. The sales of the company upto December 2010 is Rs.237.62 crores incurring an estimated loss of Rs.96.44 crores.

Farmer Training Camp

43

7.2.4

Public/Staff grievance redress machinery and Status of Grievances: A Grievance Redressal Committee headed by Company Secretary and consisting of representatives from recognized Union & Joint Council of Officer, is in operation to look into the individual grievances of the employees and the citizen. Aggrieved employees submit the grievances to the Coordinator of the Committee and in the sitting of the Committee, grievances are redressed. Complaints received are uploaded in Online Public Grievance Lodging and Monitoring System set up by Govt. of India. The company uploads complaints and attends to them promptly. The company also provides information to citizens under Right to Information Act 2005. During 2010-11 upto November 2010, 12 applications seeking information under RTI Act were received. Requested information has been provided as per the provision of the Act.

7.2.5

Employment of SC/ST, Ex-Servicemen, Physically Handicapped & other backward classes persons The matter of employment of persons belonging to SC/ST, Ex-servicemen, Physically handicapped & other backward classes are taken care at the time of recruitment and promotions. Reservation policy has been followed as per Government guidelines.

7.2.6

Welfare of minorities and reservation in dealership Welfare of minorities are looked after and directive of Prime Ministers 15 Point Programme relating to welfare of minorities are followed during recruitment and promotion. At the time of promotion and recruitment, a representative of the minority is included in the Selection Committee for promotion and recruitment. In the reservation of dealership, the policy laid down by the Government of India is being followed at the time of appointment.

Republic Day Celebration

44

Category-wise details of SC/ST Dealers are as follows: ST Category: 57 SC Category: 12 Total Dealers: 602 7.3 7.3.1 The Fertilizer Corporation of India Limited (FCIL) Introduction The Fertilizer Corporation of India Limited (FCIL) has its units located at Sindri (Jharkhand), Gorakhpur (Uttar Pradesh), Ramagundam (Andhra Pradesh) and Talcher (Orissa). It also has an un-commissioned project at Korba (Chhattisgarh). Against the authorized share capital of the Company of Rs.800 crore, the paid up share capital is Rs. 750.92 crore as on 31.3.2010. 7.3.2 Reference to BIFR The Corporation was declared sick in November, 1992 by the Board for Industrial and Financial Reconstruction (BIFR). 7.3.3 Closure of the Company In view of the continuing losses of the Company, stemming from technical and financial non-viability of operations, the Government decided to close down FCI in September 2002. Consequently, a Voluntary Separation Scheme (VSS) was offered to all its 5712 employees. All the employees, who opted for VSS have since been released, except 35 employees who are engaged in discharging statutory obligations, including safety & security of properties/ assets of the various units of the Company. BIFR in their meeting held on 2.4.2004 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. This reference was registered as Company Petition (C.P.) No.183/2004 in the High Court. Pursuant to the prayer of the Department of Fertilizers 7.3.4

and the Company, the High Court in its hearing held on 20.8.2010 has remitted the matter back to BIFR for revival. Revival of the Company Considering the shortage of domestic production of urea in meeting the the various closed units of the Company, the Cabinet has decided in April 2007 to consider the feasibility of reviving the various units of Fertilizer Corporation of India Limited. Subsequently, Cabinet constituted and Empowered Committee of Secretaries (ECOS) on 30.10.2008 to consider various options of revival and further approved in principle to consider waiver of GoI Loan & Interest, in case of availability of viable fully tied up revival proposal. After detailed study and recommendations for a revival option, ECOS on 24.8.2009 selected a suitable Revival Model and recommended the same for seeking the approval of GoI. Following PSUs & Co-operative have shown interest in the revival of some Units of the Company: a. b. c. GAIL-RCF-CIL for Talcher Unit NFL-EIL for Ramagundam Unit SAIL-NFL for Sindri Unit

Considering the above, ECOS in their 3rd meeting held on 4.8.2010 recommended permitting revival by these PSUs & Cooperative on nomination basis at reserve values of the bid parameters of the revenue sharing model, subject to approval of CCEA. FCIL & DOF are in the process of finalizing a Draft Rehabilitation Scheme (DRS) with the assistance of the Project Advisor, M/s Deloitte and approval of CCEA would be sought on the DRS. The case came up for hearing before the Honble BIFR on 12.11.2010 and on deliberations of the progress made, the Honble Bench advised as under: (i) Appointed State Bank of India as the Operating Agency;

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(ii)

Advised the Company/DoF to obtain the approval of the Cabinet for the proposed Revival Scheme and suggested that the waiver of liabilities of FCIL towards CPSUs and Government agencies through One Time Settlement (OTS) also be taken up. 3rd

Rs.10 and a premium of Rs.5 per share. Of these, 2, 58, 09,700 shares were subscribed. Sector-wise Paid up share capital and the shareholding pattern are as follows: Shareholder GOI NIOC Public Total Rs. in Cr 95.85 41.52 23.73 161.10 % 59.50 25.77 14.73 100.00

(iii) The next hearing is scheduled for March 2011 for consideration of Revival Scheme approved by the Government. 7.3.5 Financial Results

During the year 2009-10, the Company incurred a net loss of Rs. 585.09 Crore, which includes Rs.553.14 Crore as interest on GoI Loan and Rs.1.62 Crore towards depreciation. During the year 2010-11 (Upto November 2010), the Company has incurred a loss of Rs. 367.23 crore (Prov.) with an Interest of Rs. 363.00 crore on GoI Loan and Rs. 0.27 crore towards depreciation and the Company would incur a loss of Rs. 552.00 crore (Approx.) and Rs. 0.4. crore towards depreciation during the whole year (2010-11). 7.4. 7.4.1 Madras Fertilizers Limited (MFL) Introduction Madras Fertilizers Limited (MFL) was incorporated in December 1966 as a Joint Venture between GOI and AMOCO India Incorporation of USA (AMOCO) with GOI holding 51% of the equity share capital. In the year 1972, NIOC acquired 50% of the AMOCOs share and the shareholding become 51% GOI and 24.5% each of AMOCO and NIOC. In 1985, AMOCO disinvested their shares, which were purchased by GOI and NIOC in their respective proportions on 22.07.1985. The revised share holding pattern was GOI 67.55% and NIOC 32.45%. Subsequent to the Issue of Rights shares in 1994 for part financing the Project, the holding GOI & NIOC stands at 69.78% and 30.22%. During 1997, MFL has gone for Public Issue of 2,86,30,000 shares with face value of

Though the Company has an authorised share capital of Rs.365 Cr comprising of Rs.175 Cr as equity and Rs.190 Cr as preference share capital, the preference share capital is yet to be issued and subscribed. As on 30.11.2010, the paid up equity was Rs.161.10 Cr. MFL commenced commercial production in 1971, with an annual installed capacity of 2, 47,500 MT of Ammonia, 2, 92,050 MT of Urea and 5, 40,000 MT of NPK. A major revamp / expansion was carried out in 1998 at a cost of Rs.601 Cr, enhancing the annual installed capacity to 3, 46,500 MT of Ammonia, 4, 86,750 MT of Urea and 8, 40,000 MT of NPK. With effect from 01.04.2003, GOI introduced a New Pricing Scheme I and adopted Tariff Committee Recommendations for the Complex fertilizers. In the year 2003-04, the accumulated loss eroded the total net worth and therefore the Company was referred to BIFR. On account of implementation of New Pricing Scheme (NPS) Stage III amendment by GOI restricting the reduction in fixed cost to 10%, the Companys operation for the financial year 2009-10 ended with a profit of Rs.6.88 Cr. During the year 2009-10, the Company produced 4, 36,100 MT of Urea with capacity utilisation of 90%. The Company produced 7335 MT of 20:20:0:13 to IPL on tolling basis by restarting NPK A Train. 7.4.2 Reference to BIFR The Company has been referred to Board for Industrial and Financial Reconstruction

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(BIFR) of the total erosion of net worth and its current negative value. The BIFR had registered the Company as Case No.501/ 2007. In the first hearing held on April 2, 2009, MFL was declared as Sick Company under Section 15 of SICA and State Bank of India (Commercial Branch, Chennai) was appointed as the Operating Agency (OA) to prepare a Draft Revival Scheme (DRS) by BIFR. In order to prepare a viable proposal for DRS, PDIL was engaged for preparation of viability proposal for MFL and PDIL submitted the same to OA and Company. Company forwarded the viability proposal to DOF with due approval of Board. In the PDILs Viability proposal for MFL, the technical viability of the Company was covered in detail and the financial viability has been slightly touched upon. In Order to firm up the financial rehabilitation, OA engaged SBI CAPS for preparing financial rehabilitation proposal and SBI CAPS accordingly prepared and forwarded the same to OA and Company, who in turn forwarded the report to DOF after obtaining approval from Board, for further proceedings. 7.4.3 Production Performance The annual installed Capacity of MFL is as follows: Product Ammonia Urea NPK Annual Capacity (MT) Pre-Revamp 2,47,500 2,92,050 5,40,000 Post-Revamp 3,46,500 4,86,750 8,40,000

During the year 2010-11, the Company shall achieve a Bio Fertilizer production of 450 MT. 7.4.4 Financial Performance During the year 2009-10, the Company ended up with a profit of Rs.6.88 Cr and the total accumulated losses as on 31st March, 2010 was Rs.787.05 Cr. During the period April December 2010, the Company has estimated to earn a profit of Rs.52.59 crores out of the total turnover of Rs.1042.56 crores. 7.4.5 Information relating to welfare of Minorities and reservation in dealership: We have been following GOI guidelines on inclusion of representative from minorities in selection committee for Recruitment of more than ten candidates. Mr. R Lawrence, General Manager (HR & M&D) was nominated in the selection committee as P&A nominee, OBC representative and Minority representative in the recent recruitment of Technical Assistant Trainee during 2010. The Company has a dealer strength of 5900 including 1614 SC/ST dealers which works out to 27.14% of total strength. The SC/ST dealers are allowed waiver of security deposit of Rs. 5000/- and exemption from minimum sales norms 7.4.6 Efforts and initiatives taken by the PSU for the Welfare, Development and Empowerment of Women and for mainstreaming gender issues. MFL do not have any problems related to gender issues. However, a wing of Women in Public Sector (WIPS) is functioning in MFL and women employees are nominated for the programs organized by WIPS. 7.5 7.5.1 Project & Development India Limited (PDIL) Introduction Projects & Development India Limited (PDIL) an erstwhile Division of the Fertilizer

During the period April to December 2010, the Company produced 3,34,071 MT of Urea with the capacity utilisation of 91.5%. The Company is hopeful of producing 4, 60,000 MT of Urea with capacity utilisation of 94.5% during the year. The company is also planning to produce 40,000 MT of Vijay 20:20:0:13.

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Corporation of India (FCI) was registered as a separate company in March 1978. 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.17.30 crores as on 31.3.2010. 7.5.2 Financial/Physical Performance The company had earned net profit of Rs.21.21 Crores for the year 2009-10 out of the total turnover of Rs.83.53 crores. During the period April to December 2010, a profit of Rs.19.54 Crores (before tax) has been earned out of the total turnover of Rs.71.26 crores. The estimated net profit for the year 2010-11 is Rs.26.33 Crores.

7.5.3

Declaration of Dividend A dividend of 22% (Previous Year 20%) of the paid up capital of the company amounting to Rs.3.81 crores (dividend tax extra) for the year 2009-10 has been paid to Govt of India.

7.5.4

Excellent Ranking in MOU PDIL has won prestigious MOU Excellence Award for the year 2008-09 for Top performing CPSE in Consultancy Sector. PDIL has won the prestigious MOU Excellent Award for the year 2007-08 for Turnaround CPSE & also secured Excellent rating for the year 2006-07 and expecting Excellent rating for the year 2009-10.PDIL has performed exceedingly well in last five years

Catalyst produced by PDIL

48

continuously and has become eligible for Mini Ratna Category-II Status under the DPE Scheme of Mini Ratna. 7.5.5 Engineering & Consultancy Division PDIL has played a pivotal role in the development of Fertilizer industries in India from concept to commissioning. It is still continuing its hold on this sector and is ready to take up the new challenges in executing the Brown field, Green field, Revamp and Expansion Projects of many fertilizer units in the country. It has also diversified its activities into the field of Oil and Gas, Pipeline, Refinery and Infrastructure Development such as Housing project and City Gas Distribution etc. During the year under review PDIL secured a prestigious order for providing detailed engineering and consultancy services for a 2200 MTPD Ammonia Plant at Panagarh, West Bengal for M/s Matix Fertilizers and Chemicals Ltd. The plant will be the first plant in India based on Coal Bed Methane Gas as a feed stock. It also secured orders for providing Consultancy Services for the Capacity enhancement project in Ammonia II & Urea II plant of NFL Vijaipur as well as Consultancy services for Urea-I Capacity Enhancement Project of NFL, Vijaipur. The Company was also successful in getting PMC Services for Ammonia Syn Gas Generation plant from GNFC Bharuch and NFLs Feedstock changeover project for Panipat, Bathinda & Nangal Plants. During the year 2009-10 the company is executing the following major projects / assignments in the fertilizer sector for various clients: Detailed Engineering consultancy for capacity enhancement for Vijaipur II Ammonia- Urea for NFL. Detailed Engineering Consultancy for capacity enhancement of Vijaipur I Urea for NFL. Detailed Engineering Consultancy Services for Surat Ammonia - Urea

7.5.6

Debottlenecking for KRIBHCO is progressing satisfactorily. Detailed Engineering jobs for Thal Ammonia Revamp, RCF Thal Consultancy Services for Energy Saving Project of Ammonia Plant-I of Vijaipur Unit (NFL). Feed Stock Changeover of Zuari Industries Ltd.

Refinery, Oil & Gas and other Sectors PDIL has established its credentials in the Oil and Gas sector and has shown its presence by securing jobs from almost all the prestigious public sector undertakings in the Oil and Gas sector. It secured the job of Project Management Consultancy services for installation of H2 and N2 facilities at Paradeep Refinery project on BOO basis from IOCL, New Delhi. It also secured the job of Engineering Consultancy services for Flue Gas Desulphurization units (FGDU) and Purge Treatment Unit (PTU) for FCCU unit at Vizag Refinery of HPCL, Vizag. It is successfully executing the PMC services for a Hydrogen plant of Chennai Petroleum Corp. Ltd., Manali. It has also successfully completed the job of Hydrogen Generation Unit of Essar Refinery at Vadinar. The job of Hydrogen Generation plant of IOCL Barauni and 60 TPD Sulphur Recovery Unit-IV of IOCL Mathura Refinery is progressing well. With the execution of these jobs PDIL has got confidence to take up more jobs in the Oil & Gas sector.

7.5.7

Inspection & NDT PDIL has established its credentials for Third Party Inspection (TPI) and Non Destructive Testing (NDT) Services, Statutory inspection, testing and certification of Horton Spheres, Mounded LPG Bullets. Inspection and recommissioning of Ammonia Storage Tanks etc. continued to be a specialized activity of PDIL.

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On the basis of credential and satisfactory past performance, Bharat Heavy Electricals Limited (BHEL), extended the TPI Rate Contract for one more year i.e. upto March, 2011 for third party inspection of various equipment and bought out items ordered by all Manufacturing Units of BHEL throughout India. Jobs are being carried out to the full satisfaction of BHEL and their clients NTPC, PGCIL and DVC. Various Oil and Gas companies such as GAIL, CPCL, IOCL, HPCL reposed confidence in PDIL by awarding the inspection and NDT jobs to PDIL. IOCL continued to be a major TPI client. Most of the orders for Project Management Consultancy (PMC) for Terminal Automation System (at Meerut, Haldwani, Allahabad, Kanpur, Mugalsarai, Tikrikalan, Patna, Kandla, Rajkot, Hazira, Sangrur, Bhatinda, Devangundi, Bijapur, Cochin, etc.) have been awarded to PDIL. During the year PDIL has been awarded one prestigious Order by HPCL, Mumbai for Terminal Automation System. Apart from the above, PDIL also received TPI orders for Automation of Retail Outlets, automation of tank truck filling and tank farm management system for POL Depots and CCTV surveillance system in IOCL Depots and other installations under IOCLs various state offices. IOCL also awarded orders for electrical safety audit of their LPG Bottling Plants, Oil Terminals and Oil Depots and Retail Outlets. During the year PDIL carried out Inspection of Petroleum Horizontal Storage Tanks for IOCL. PDIL also got Orders from IOCL for Electrical Safety Audit of their LPG Bottling Plant, Oil Terminal and Oil Depots. 7.5.8 Techno-Economic Feasibility Report One of the major activities of PDIL continued to be preparation of Techno Economic Feasibility Report. During the year PDIL has secured number of jobs in this area like Preparation of DFR for the proposed

Ammonia Urea Fertilizer Project based on Coal Bed Methane, TEFR for ammonia urea plant in Karnataka-ZIL, Preparation of a TEFR for a Phosphatic Fertilizer Complex for GECOPHAM- Syria, Asset Evaluation of Ammonia - Urea plants at FACT- Kochi, Preparation of Basic Data relating to Gas based Economic activities in the given Geographical area (Six Geographical Areas) for M/s PNGRB, TEFR for Natural Gas Pipeline in HP for M/s Directorate of Industries Govt. of HP, Detailed Audit of the Technical Operations/ Energy efficiency parameters for M/s FACT and Project Advisory services for revival of FCILs 4 Nos. Units (Module B) 7.5.9 Assignments Aborad PDIL is striving hard to make a breakthrough in securing assignments from abroad. Presently PDIL is providing PMC Services for Algeria Oman Fertilizer Project at Arzew, Algeria for AOA, Algeria. PDIL is also executing the job of Health Study of Natural Gas Let Down station in Ammonia Plant at Oman for OMIFCO (Oman India Fertilizer Company). It also secured the job of preparation of TEFR for Phosphatic Fertilizer Complex for GECOPHAM, Syria for Department of Fertilizer and Chemicals, Govt. of India. It further secured the job of Study of Design and Drawings of existing structural of Granulation House to suit the new Rotex make vibrating screens from OMIFCO 7.5.10 Technical Audit Department of Fertilizers (DOF) continued to engage PDIL for Techno-commercial Audit of SSP Plants located throughout India. The Audits were undertaken and the reports with TAC observation and comments have already been submitted to DOF. 7.5.11 Engineering Business PDIL has executed engineering jobs worth Rs.66.37 Crores during the year as compared to Rs.48.70 Crores in previous year, an increase of 36.28 %.

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7.5.12 Catalyst Division DIV For Fertilizer Industry PDIL continued to produce catalyst such as HT CO Conversion shift catalyst (conventional), LT CO Conversion Shift Catalyst (conventional), Vanadium Pentoxide Catalyst, PRG Catalyst, Iron oxide and Alumina Balls. PDIL executed prestigious orders for supply of LT CO conversion shift catalyst to GSFC, Vadodara, Nickel based reformation catalyst to RCF, Trombay, HT Co Shift Catalyst to HPCL, Vizag & GSFC & Vanadium Pentoxide Catalyst to SAIL, Rourkela. To sensitize the employees about the evils of corruption and to create awareness about Vigilance, the Vigilance Awareness Week was observed from 3rd November to 7th November, 2009, with active participation of the employees at various levels. 7.5.13 Facilities to SC/ST/OBC Employees In line with Government Guidelines issued from time to time, your company continues to extend required number of facilities to SC/ ST/OBC employees. The details of employees as on 31.12.10 is as follows:EMPLOYEE STRENGTH AS ON 31.12.10 (REGULAR INCLUDING MANAGEMENT TRAINEES)
Category A B C D On Contract Total Total MIP 424 40 33 Nil 77 574 SC 48 5 10 Nil 11 74 Nil 1 22 ST 21 OBC 62 2 6 Nil 22 92

will be progressively increased to 3% by 20012-13. During 2009-10, PDIL gave contribution to I-Care towards purchase of Auto Refractrometer for performing free of cost surgeries of poor and under privileged rural population. It also contributed for sponsoring education of slum children and for help of handicapped children for their surgeries. An amount of Rs. 5.2 lakhs has been earmarked for SPCA Hospital. 7.6 7.6.1 Hindustan Fertilizer Corporation Limited (HFCL) Status of Companys case with BIFR. The Company was referred to BIFR in the year 1992 and since then it is still under BIFR. The Govt. of India had decided to close down Barauni and Durgapur Units and Haldia Division along with other offices and Establishments of the Company in the year 2002.In the hearing held on 08.03.2010, the BIFR requested for expediting the revival process. 7.6.2 Status of Revival of Units/Divisions of HFCL An Empowered Committee of Secretaries was constituted with the mandate to evaluate all financial options for revival of the closed units of FCIL/HFCL and to make suitable recommendations for consideration of the Government. The Empowered Committee of Secretaries had submitted its recommendations after a series of meetings. Based on the recommendations of ECOS & DOF, a draft CCEA note was prepared and circulated for inter-ministerial consultations. 7.6.3 Financial Performance During the year under report, the Company made an operating profit of Rs. 35 lakh, but incurred a loss of Rs. 382.47 crore after considering prior period adjustments and tax as compared to previous years net profit of Rs. 4841.16 crore. The Unit-wise break up of net profit and loss is given below in the Table:

7.5.14 Corporate Social Responsibility PDIL is aware about its Corporate Social Responsibility towards the community in which it operates. It has been decided to make an expenditure on socially relevant schemes upto 1% of its profit after tax, which

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7.6.4

Future Prospects: The process of revival of all the three Units is progressing well. The Govt. of India has also agreed in principle for waiver of all the loans and interest due to GOI. As per the revival scheme, the Company is likely to get up-front fee and revenue sharing. Therefore, the Company is on the path of revival and the net-worth is likely to become positive on implementation of revival package and waiver of loans and interests due to GOI.

annual installed capacity of 6,83,000 tonnes of Nitrogen started commercial production w.e.f. 1st June, 1985. RCF has a total installed capacity of about 10.54 lakh tonnes of Nitrogen and 1.17 lakh tonnes of P2O5 and 0.45 lakh tonnes of K2O.Besides fertilizers, the Company also produces a number of industrial chemicals such as Methanol, Concentrated Nitric Acid, Methylamines, Ammonium Bicarbonate, Sodium Nitrate/Nitrite, DMF, DMAC, etc. The capital structure of the company is as follows: Authorised Capital Paid up Capital 7.7.2 Rs. 800.00 crores Rs. 551.69 crores.

7.6.5

Voluntary Separation Scheme Since the closure of the Corporation, employees were being released under VSS. As on 31.03.2010, 4665 number of employees have been released against a payment of Rs. 283.96 crores towards exgratia and terminal benefits.

Physical Performance The company produces a number of products. The details of production of these products for the year 2009-10 and from April to December 2010 are given below.

7.7 7.7.1

Rashtriya Chemicals and Fertilizers Limited (RCF) Introduction Rashtriya Chemicals and Fertilizers Limited (RCF) was incorporated on 6th March, 1978 and it came into being as a result of the re organization of the erstwhile Fertilizer Corporation of India Limited. At the time of its formation, the company had one operating unit, viz. Trombay (old plants) and two major projects under implementation viz. Trombay IV expansion and Trombay V expansion, besides the West, South Marketing Zones and the Bombay Purchase and Liaison office. RCF was the first fertilizer company in India to commission a green field, mega fertilizer complex at Thal-Vaishet in the state of Maharashtra. The Trombay IV Expansion Project with an annual capacity of 75,000 tonnes each of Nitrogen and Phosphate (P2O5) went into commercial production on 1st January 1979. Trombay V Expansion also started commercial production w.e.f. 1st July 1982 with an annual capacity of 1,51,800 tonnes of Nitrogen. The Thal Fertilizer Plant of
Plant

Installed Capacity 2036800 300000 361000 661000 110400 115500 297000 990000 352500 99000 30000

Nine Months April 10 to Dec. 10 1591395 341461 104369 445830 108898 72825 240585 846430 266840 55528 18760

2009-10

Urea Suphala ANP Complex Fertilizers Total Indu. Products: Ammonia I Ammonia V Ammonia Thal Nitric Acid Sulphuric Acid Phosphoric Acid

2089076 490000 17070 507070 119323 87856 330235 1128320 362815 59753 17040

7.7.3

Financial performance
2009-10 5826.25 344.21 234.87 1837.14 2010-11 upto December 3968.95 216.12 149.02 1986.16

PARTICULARS Turnover/Operating Income Profit before Tax Net Profit / Loss (-) Net Worth

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7.7.4

Production Performance The annual installed capacity of all the units of RCF is about 10.36 lakh MT of nitrogen and 0.99 lakh MT of phosphate. The production of nitrogen & phosphate during 2009-10 was, 10.379 lakh MT and 0.769 lakh MT respectively. Production during the year was severely affected due to suspension of ANP production which is under revamp. Besides fertilizers, the company also produces a number of industrial products such as Methanol, Concentrated Nitric Acid, Methylamines, Ammonium Bicarbonate, Sodium Nitrate, Sodium Nitrite, Dimethyl Formamide, Dimethyl Acetamide, Ammonium Nitrate, Argon, etc. During April-November 2010, RCF produced 7.026 lakh MT of nitrogen as against 6.697 lakh MT during the period of the previous year. Company also produced 0.614 lakh MT of phosphate as against the production of 0.481 lakh tonnes of the previous year. During the year 2010-11, the Company is likely to produce 10.74 lakh MT of nitrogen and 1.047 lakh MT of phosphate.

products) during the year 2009-10 was of the order of 40.82 lakh MT corresponding to 14.35 lakh MT of nitrogen, 1.88 lakh MT of phosphate and 3.34 lakh MT of potash. During the period April-November 2010, RCF sold 9.33 lakh MT of nitrogen, 1.16 lakh MT of phosphate as against 8.83 lakh MT of nitrogen and 1.53 lakh MT of phosphate for the corresponding period last year. The Company also produces and sells biofertilizers, micronutrients and 100% solid soluble fertilizers. In the period AprilNovember 2010, the company has laid special emphasis on micronutrient and Biofertilizers. Sale of Biofertilizers, Biola was 153 MT in the period April-November 2010. In case of liquid micronutrients, Microla, the company effected a sale of 80 KL during April-November 2010. A total of 2,610 MT of the Companys specialty fertilizer (drip+foliar) was sold during the period April to November 2010. The sales turnover of industrial products division of the Company was Rs.717.77 Crore for the year 2009-10. During the period Apr- Nov 2010 sales turnover of industrial production division was Rs.460.74 Crore.

7.7.5 Sales Performance The sale of fertilizers (including bought-out

Methanol Phase-II Project, Trombay

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7.7.6

Modernization/Expansion Schemes ANP 20:20:0 granulation unit has been commissioned and plant has achieved its rated capacity. In Rapid wall plant load bearing panels have been produced since July 2010.Company has approached BMTPC for performance appraisal certification for usage of these panels for load bearing structures. Methanol plant phase-I has been commissioned in March 2010.Due to this, production capacity of methanol has gone from 180 to 225 MTPD with reduction in energy consumption to the tune of 1.0Mkcal/ MT.Under phase-II revamp new synthesis gas compressor has been installed. It is under commissioning. After this production capacity will increase from 225 to 242 MTPD. Under Thal ammonia revamp project: Urea capacity will enhance from 17.07 to 20 Lakh MT per annum after its commissioning in 2011-12. Critical long delivery equipment has been ordered and civil work is underway.

7.7.7

Grievance Redressal The Company has a good grievance address and redressal system. Any citizen having complaints in respect of the production or services rendered may approach the Company. Similarly any aggrieved customer / dealer or other citizen can approach the Company for any failure of the quality / price charged / conduct of any officer / employee and will be dealt as under. The grievances can be addressed 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 officers is available on Internet on Companys 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.

ANP Granulation Unit , Trombay

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A similar grievance address and redressal system procedure is followed by the Company in issues related to staff also. 7.7.8 Employment of SC/ST, Ex-Servicemen, Physically handicapped & Other Backward Classes The guidelines regarding reservation in Recruitment and Promotion for SC, ST, OBC, Ex-Servicemen and Physically Handicapped Persons (PHP) are followed. Out of total strength of 4241, there are 592 SCs, 258 STs, 323 OBCs, 8 Ex-Servicemen and 36 PHPs on the rolls of the Company. 7.7.9 Disinvestment 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 were effected during October 1992 and December 1994 respectively. Thus, the total disinvestment has been of the order of 7.50 percent. 7.7.10 Welfare of Minorities & Reservation in Dealership RCF has a policy to include representative of the minorities in the recruitment selection boards so as to ensure that the minorities get an adequate share in the services. 7.7.11 Welfare, Development & Empowerment of Women Women are working in technical / nontechnical / managerial positions and some of them have risen to the level of top management positions in the organization. All the welfare and employee benefit schemes are equally applicable to male and female employees of RCF. Under the special schemes and policies for women employees, RCF has set up Special Cell for Women Employees (as per Communication from National Commission on Women) e) d)

Committee for Sexual Harassment Cases (as per Supreme Court Guidelines) Special Medical check-ups/camps. All the benefits under legal requirements such as Maternity Benefits, Nursing Breaks, etc. are given to women employees. As a part of regular training, RCF incorporates awareness building for all officers (Men and Women) on the Sexual Harassment Guidelines and also covers gender sensitization issues. 7.7.12 Corporate Social Responsibility a) The Integrated Rural Development Programme - is implemented in various villages of the country. Overall development of these villages is the focal point. Some of the programmes carried out under Integrated Rural Development Programme (IRDP) are as under: Meeting Basic Needs of Rural Community - The scheme covers providing essential amenities like drinking water supply, school buildings, community centers, development of irrigation systems etc. Agricultural Development Programme This focuses on economic upliftment of small/marginal farmers and landless labourers through training and education. Subsidiary Occupation- Artisan Development Programme - This provides a platform for training and making available financial facilities to rural artisans and entrepreneurs which enable them to revive and develop their skill for commercial use. Social Forestry and Waste Land Development Programme - This focuses on development of sericulture, social forestry, waste land use, dry land farming and biogas development.

b)

c)

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f)

Public Health & Village Sanitation Programme This covers health care, village sanitation, health camps, and veterinary camps. Youth and Women Skill Development Programme - Rural sports and cultural activities are organized in different villages to encourage participation by youths. Soil Testing - The Company places tremendous importance on empowering farmer to increase the yield. Soil diagnostics form a major part of determining which fertilizer needs to be used for each soil and crop. The Company has 5 static and 3 mobile soil testing laboratories across its major marketing territories which undertakes soil sample analysis. About 70,000 soil samples are analyzed every year. Micronutrient Analysis - To increase crop yield the presence of micronutrients in adequate proportion is necessary. Micronutrients analysis identifies the deficiency in the soil and prescribes doses of micronutrients that need to be applied to ensure optimum yield. About 1000 samples are analyzed every year. Earn While You Learn Scheme - This is a unique scheme that has been developed by the Company. It seeks to educate and train children studying in class IX and above to participate in the process of agricultural development. These students are trained to understand latest developments in agriculture and transfer this knowledge to the farming community. The scheme provides all opportunities to students to earn while they learn. The students participating are offered token money which supports them while studying and at the same time imparts practical knowledge of agriculture to them. The students are required to do field extension work for promoting specialty fertilizers, micronutrients & bio fertilizers

during vacation and holidays 7.8 7.8.1 National Fertilizers Limited (NFL) Introduction NFL is a Schedule A and Mini Ratna Company, which was incorporated on 23rd August, 1974 for setting up of two Nitrogenous fertilizer plants, based on gasification technology of Feed Stock / LSHS at Bathinda (Punjab) and Panipat (Haryana) having an installed capacity of 5.11 lakh tonnes of Urea each. The commercial production from these plants commenced w.e.f. 1.10.1979 & 1.9.1979 respectively. Consequent upon reorganization of FCI in April 1978, the Nangal unit (including Nangal expansion project) of FCI was transferred to NFL. The Govt. of India, in 1984, entrusted the Company to execute the countrys first inland gas based fertilizer project of 7.26 lakh tonnes Urea capacity in District Guna of Madhya Pradesh and commercial production started from 01-07-1988. Expansion of Vijaipur Plant was taken up in the year 1993 for doubling its annual production capacity. The commercial production from Vijaipur Expansion Plant commenced with effect from 31.3.97. The Department of Fertilizer subsequently re-assessed the annual installed capacity of Vijaipur Plants from 7.26 lakh tonnes of Urea to 8.64 lakh tonnes (each) with effect from 1st April 2000. A revamp of Urea plant at Nangal for increasing the production from 3.30 lakh tonnes to 4.78 lakh tonnes per annum was under taken and commercial production commenced from 1st February 2001 raising the total present annual installed production capacity of Urea at NFL to 32.31 lakh tonnes (i.e. 14.86 lakh tonnes in terms of Nitrogen Fertilizer). The Company also produces various Industrial Products, like Nitric Acid, Ammonium Nitrate, Sodium Nitrite, Sodium Nitrate, Sulphur, Methanol, Argon Gas, Liquid

g)

h)

i)

j)

56

Nitrogen, Liquid Oxygen etc besides Biofertilizers. Bio-Fertilizers plant at Vijaipur produces three strains of Bio-Fertilizer namely PSB, Rhizobium & Azotobacter. Company has also started marketing of special fungus based bio-fertilizer Mycorrhiza under the brand name of Kisan Mycorrhiza The value-added Neem Coated Urea developed by NFL & widely recognized for its effectiveness is being produced at its three units at Panipat, Bathinda & Vijaipur. NFL is the first company in India to be permitted by the Government of India to produce and market Neem Coated Urea. The authorized capital of the company as on 31-03-2010 stood at Rs.500 crore and the paid up capital at Rs.490.58 crore, comprising Govt. of India share of Rs.479 crore (97.64%) and remaining Rs.11.58 crore (2.36%) held by financial institutions and others. 7.8.2 Modernization and Expansion Projects The year 2009-10 was a landmark year for the Company. Consequent upon notification of remunerative investment policies by Government of India in Urea sector, the Company has undertaken a number of projects as follows:Revamp of fuel-oil based plants at Panipat, Bathinda & Nangal Company has undertaken revamp of fuel-oil based plants at panipat, Bathinda & Nangal for change over of feedstock from FO/LSHS to NG/RLNG. Zero date of these projects has been fixed as 29th January 2010. These projects involve a total investment of Rs.4066 crore and gestation period of 36 months from the zero date i.e. 29th January 2010. Contract for revamp of Panipat and Bathinda units has been signed with M/s Larson & Toubro (L&T) on 10th March 2010 and for Nangal unit with consortium of M/s Tecnimont ICB (TICB) on 12th May 2010. M/s Project & 7.8.3

Development India Limited (PDIL) has been engaged as Project Management Consultant for all the projects. Capacity Augmentation & Energy Saving Project (ESP) at Vijaipur Company has undertaken Capacity augmentation of urea plants at Vijaipur-I & II by 16% and 23% respectively including installation of Carbon Dioxide Recovery plant at an investment of around Rs.900 crore. The total urea capacity after completion of Energy Saving project at Vijaipur-I and Capacity Enhancement Project at Vijaipur-II is expected to be 6261 MTPD. Basic engineering for Ammonia-I, Ammonia-II, Urea-I and Urea-II has been completed. Procurement of equipment is in progress. The projects are expected to be commissioned by 2011-2012. NFL in collaboration with M/s KRIBHCO & RCF has formed a joint venture company (JVC) named as Uravarak Videsh Limited to explore investment opportunities abroad and within country in Nitrogenous, Phosphatic & Potassic sectors and to render consultancy services for setting up Projects in India & Abroad. The Companys Marketing Network comprises of Central Marketing Office at NOIDA, three Zonal Offices at Bhopal, Lucknow & Chandigarh, 16 State Offices and about 38 Area Offices spread across the country. Production Performance The Company, during 2009-10, produced 33.30 lakh tonnes of Urea (103.7% of installed capacity). The company achieved ever best production of 226 tonnes of Biofertilizers and 37648 tonnes of Neem Coated Urea. The percentage share of NFL in Urea production in the country has been estimated at 15.8%. Company has also started the production of foundation and certified seeds under a pilot project. During 2010-11 upto December the company produced 25.28 LMT of Urea utilizing 104.3% capacity.

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R&D Activities at Nangal Plant

7.8.4 Sales performance The company, during 2009-10, sold 33.78 lakh tonnes of Urea. Company achieved ever best Bio-fertilizers sales of 196 tonnes. It also sold 3468 tonnes of seeds during the year. The sales turnover including subsidy for the year was Rs.5091.34 crore. During the year, sales turnover for industrial products is Rs.98.35 crore. The Company also sold Compost, Mycorhizza & seeds of the value of Rs.7.31 crore. 7.8.5 Financial Performance The Company has achieved a profit before tax (PBT) of Rs.259.91 crore during FY 200910, Rs.155.61 crore during FY 2008-09, Rs.155.82 crore during FY 2007-08. The Company has achieved a profit before tax

(PBT) of Rs.163.46 crore during the current financial year i.e. 2010-11 (up to December 2010). Detailed statement is as follows: 2007-08 TO 2009-10 and 2010-11 (up to Dec.2010)
Rs. in crore Particulars Amount 2007-08 Amount 2008-09 Amount 2009-10 Amount 2010-11 (upto Dec.2010) 235.08 65.98 5.64 163.46 51.68 11.78

Gross margin Less: Depreciation Less: Interest Profit before tax (PBT) Less: Tax Profit after tax

261.76 89.30 16.64 155.82 47.17 108.65

292.91 96.41 40.89 155.61 58.15 97.46

364.55 93.75 10.89 259.91 88.40 171.51

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Director (Finance), NFL receiving ICWAI AWARD to Bathinda Unit for Cost Management

7.8.6

Employment of SC/ST, Ex-Servicemen, Physically handicapped & Other Backward classes Persons (As on 30.9.2010) The guidelines regarding reservation in Recruitment and Promotion for SC, ST, OBC, Ex-Servicemen and Physically Handicapped Persons (PHP) are followed. Out of total strength of 4673, there are 1211 SCs, 285 STs, 322 OBCs, 81 Ex-Servicemen and 54 PHPs on the rolls of the Company. 7.8.8

the year 2010-11, the company has entered into MoU with DoF which is the 20 th consecutive year of the signing. Awards & Accolades Company excelled in performance in various areas, which got recognition from various quarters during the year. The company has received the ninth consecutive Excellent MoU rating for the fiscal year 2008-09. Vijaipur unit received Green Tech safety award 2009 in Fertilizer sector from Green Tech Foundation, New Delhi. For best safety practices. Vijaipur unit has also been awarded cash prize of Rupees one lakh & Certificate of Honour during the year by Department of Commercial Tax, Government of Madhya Pradesh for Best Tax Payer for

7.8.7

MoU NFL received the 9th consecutive Excellent MoU rating for the fiscal year 2008-09. The company is also expected to receive Excellent rating for the year 2009-10. For

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2007-08. Vijaipur unit also received Second Award for Bio-Fertilizers in manufacturing sector for the year 2006-07 from National Productivity Council, New Delhi. Vijaipur unit & Panipat Unit also received National Safety Awards. Bathinda unit received First prize for achieving largest reduction in Accident Frequency Rate in Chemical Industry for the year 2009 from Punjab Industrial Safety Council, Chandigarh. 7.8.9 Public / Staff Grievance Redress Machinery Based on the model grievance procedure notified by DPE, company has framed a Grievance Redressal Procedure for employees of NFL. The objective of the Procedure is to provide easily accessible machinery for settlement of grievances and to adopt measures as would ensure expeditious settlement of grievances of employees leading to increased satisfaction on the job and resulting in improved productivity and efficiency of the organization. For systematic monitoring and supervision of Public Grievances, Head of Corporate HR Department has been nominated as Director (Grievance). In addition to this, the company has also set up Public Grievances Cell at the Units which is headed by a Grievance Officer, who generally belongs to senior management cadre. Apart from this on the Companys website www.nationalfertilizers.com, a feedback form has been created for posting of query/ grievances by the public. 7.8.10 Information relating to welfare of Minorities and reservation in dealership. The organization believes in equality of all communities and follows all Government regulations on empowerment of minorities such as representation of the minority communities on interview boards in Group C & D. As on 30-09-2010, the percentage share in NFL dealership under SC/ST category is 26.72%.

7.8.11 Environment Management The Company has in place a system for controlling and monitoring pollutants at all units complying with environmental standards and legislations. Resource conservation, waste management and pollution prevention are the driving forces for environmental excellence at our company. Silo system for collecting fly ash from ESP Hoppers using dense phase pneumatic conveying system has been installed at Panipat and Bathinda units for evacuation of ash from the plants. All the Units are ISO 9001-2000 certified for Quality Management System, ISO-14001 certified for Environment Management System and have received OHSAS-18001 certification for Occupational Health and Safety Management System. Company has finalized and submitted the project development document for installation of facilities for reducing Nitrous Oxide emissions from Nitric Oxide Plant at Nangal. The project shall enable the company to earn Carbon Credits under Clean Development Mechanism. Company is putting up a Carbon Dioxide Recovery plant of 450 MTPD capacities for recovery of Carbon Dioxide from Flue gases of primary reformer at Vijaipur. This will also help in reduction in discharge of green house gases. 7.8.12 Corporate Social Responsibility and Agriculture Extension Activities Company is committed towards improving the crop productivity and living standard of socio-economically weaker sections of the society and educating farmers about the efficient use of fertilizers. In furtherance of this cause, during the year 424 field demonstrations and 161 R&D trials were undertaken on different crops in different areas. Around 60,000 soil samples were collected and tested for nutrient deficiency and analysis report provided to the farmers. Krishi Melas, exhibitions, crop seminars, farmers & dealers training programmes and study tours organized to disseminate

60

information regarding improved farm technology and establish direct communication with the farmers and also to educate the farmers of the balanced use of fertilizers and its timely application besides providing guidance on pesticides & fungicides. More than 2 lakh crop literature in the form of folders, leaflets, pamphlets in local languages were distributed during these programmes. Krishi diary, an annual publication for farmers and Kisan Sandesh, a season-wise crop advisory newsletter was addressed to farmers. A number of health camps for women and children, animal health camps, vocational training programmes were organized. Water tank, water coolers, solar lights, tricycles, school furniture, books etc. were also distributed. Vijaipur, Panipat, Bathinda and Nangal Units carried out various activities for the benefit of socially and economically weaker sections of the society in their peripheral areas. Health awareness programmes, medical camps were also organized. Financial aid, blankets, sewing machines etc. were provided to the poor and needy persons of the nearby villages. Scholarship to meritorious students belonging to SC/ST categories, stationery items, sweaters, furniture items etc. were also distributed to school children. Community works in the surrounding villages such as construction of boundary wall, flooring work and other civil works at nearby schools were also carried out to provide better environment for the students. 7.9 7.9.1 The Fertilizers and Chemicals Travancore Limited (FACT) Introduction Fertilizers 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/ multifunction Organization with basic interest in manufacture and marketing of Fertilisers and Petrochemicals, Design Engineering & Consultancy and in Fabrication & Erection of Industrial Equipment. 7.9.2 Performance During the Financial Year 2009-10 FACT has made an upsurge in Production and sales. For the continuous second year, company could maintain a turnover above Rs. 2100 Crore. Production, Sales and profitability of the company for the year 2010-11 upto December 2011 as compared to 2009-10 & 2008-09 is given below:
2009-10 Production/in Tonnes Factamfos 20:20 Ammonium Sulphate Caprolactam Sales/ in lakh Tonnes Fertilizers Caprolactam Financial /Rs. Lakh Profit/Loss(-) before tax (-)10370.34 4311.44 *including traded products (-) 1409 10.45 0.38 8.33 .0.12 7.18* 0.32 753744 179546 42006 605047 128845 13548 481457 145554 32070 2008-2009 Apr-Dec. 2010

7.9.3

Performance Highlights During the current year up to November 2010, the company produced 4.42.749 MT of NP which is 97% of the target . Production of Ammonium Sulphate during the period was 125897 MT which is 113% of the target. During the financial year up to November 2010, the total sale of Fertilizers is 7.18 lakh MT valued at Rs.1427.94 crores compared to Rs. 1276.54 crores for the corresponding period last year.

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Company sold 45475 MT of imported MOP during the period. Sale of Gypsum reached 252050 MT till November 2010. New fertilizer products, Zinc fortified Gypsum, FACT Organic, and Zincated factamfos launched last year are moving smoothly in the market. Caprolactam sales for the period April-Nov. 2010 is 28112 MT of which 6460 MT was exported. Commercial production of the Zincated factamfor began this year and till date a total of 19199 MT of zincated factamfos has been sold in the market. This product provides higher returns to FACT and will also serve to promote the balanced use of fertilizer nutrients in the country. 1) FACT-RCF Building Products Limited (FRBL) FACT has formed a Joint Venture Company with Rashtriya Chemicals & Fertilizers Limited for manufacturing load bearing panels and other building products using phospho gypsum. The project is expected to achieve mechanical completion during January 2011. Commissioning shall begin shortly. 2) Switch over of feedstock and fuel to LNG LNG which is a cheaper feedstock than the presently used Naphtha is expected to be available from the upcoming Terminal being set up by Petronet LNG at Puthuvypeen. FACT has taken steps to carry out modification of its existing Ammonia plant and also the boilers for the use of LNG. M/s. Haldor Topsoe who is the licensor for Ammonia plant has submitted detailed offer for engineering works for the feedstock conversion of the Ammonia plant. BHEL has undertaken a study for the conversion work for the boilers. FACT intends to change over these plants for dual feedstock and fuel in order to take

advantage of the relative economies of different raw materials. FACT is also taking steps for a Gas Transmission and Gas Supply agreement with GAIL/BPCL/IOC for the transport and supply of the required quantities of gas from the LNG Terminal. However the proposed price of LNG at Kochi terminal is US$14-15 per mmbtu when compared to average price of US$ 4-5 per mmbtu for natural gas, raises concern to the company in the scenario when additional subsidy is withdrawn after change over to gas. 3) Expansion and Diversification plans FACT has drawn up plans to set up a 5 lakh MT per annum Urea plant at Udyogamandal as an add-on to the existing Ammonia plant utilizing the carbon dioxide being vented from this plant. Preparation of the Detailed Project Report and selection of the process licensor is in progress. The cost estimated for this project is Rs.695 crore. Implementation of this project is scheduled for 2012-13. FACT is going ahead with its plans to expand the production capacity of complex fertilizers at FACT (Cochin Division) from 2000 TDP to 3000 TDP. Site selection has been completed and preparation of the DPR is in progress. To cater to the higher volumes of raw materials to be handled up on expansion of the production facility, expansion/ revamp of the Raw material handling facility at Willingdon Island has also been planned. The total cost of these ventures is expected to be approximately Rs. 283 crores. FACT ventured into the field of infrastructure development by entering into MOUs with Container Corporation of India (CONCOR) and Central Warehousing Corporation (CWC) for setting up Container Freight Stations by

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A view of the revamped cooling tower of FACT Petrochemical Plants which was inaugurated on June 22, 2010

the side of the newly laid highway to the Vallarpadam Container Transshipment Terminal which passes through FACTs premises. The final business plans for these ventures has been drawn up. Construction of these Freight Stations is expected to be completed within a year. A joint venture with Kerala State Industrial Development Corporation for setting up a state of art convention centre at its Udyogamandal premises is also being considered and detailed feasibility report for this is under preparation. 7.9.4 Redressal of Public Grievances and Welfare Measures A Public Grievance Cell is functioning in the Company, as per norms laid down by

Government of India. Grievances are attended to promptly. 7.9.5 Employee Grievance Redressal Machinery There is a redressal Machinery to attend to employees grievances in the company. Generally the grievances are related to work, work place, shift arrangement grant of increment, promotion, salary fixation, transfer, etc. An aggrieved employee may submit a complaint/request for settling the grievance in the Division and if still aggrieved with the decision of the Division Head, it may be submitted before the appropriate Grievance Committee. Separate grievance committees exist for examining and redressal of grievances of managerial and nonmanagerial employees. The individual concerned is given an opportunity to present

63

his grievance in person before the committee, if required. The respective Committee will deliberate on the grievance and give their recommendations to the management for appropriate action. In addition, there is an SC/ST Grievance Cell that looks into complaints received from SC/ST Employees. 7.9.6 Employment of SC/ST, Ex-servicemen, Physically Handicapped & Other Backward Classes (OBCs) as on 30.11.2010. Company has a total man-power of 3340 as on 31.11.2010, out of which 458 belong to scheduled caste, 109 to scheduled tribes, 41 to Ex-servicemen, 1023 to OBCs categories, 244 women, 73 Physically handicapped and 1750 General categories. 7.9.7 Reservation in Dealership FACT has always followed a policy of encouraging SC/ST Candidates to take up dealership. Details of dealership allotted to SC/ST are given below: Category of Dealership Total Dealership SC/ST As on 31.03.2010 7948 614

Eloor Panchayat, FACT is providing about 1500 M3 water per day to more than 500 residential users of the Eloor Grama Panchayath. 2. Public Health insurance for residents of Eloor Panchayat FACT has joined hands with Government of Kerala to introduce a General Health Insurance for about 3000 families residing in Eloor Grama Panchayat. Company has contributed Rs. 8 lakh towards the premium for the General Health Insurance. 3. Farmer Education programme Regular agricultural seminars, dealer training programmes, crop campaigns, field demonstrations etc, were conducted. This helped the farmers to gain experience of scientific practices to be adopted for successful farming. Our field staff regularly make follow up to clarify doubts if any, and inculcate the adoption of modern technology for integrated farming. 4. Soil Testing and Agronomy Services During the year 2009-10, 2867 number of soil samples were collected by our field staff from various villages in the states of Andhra Pradesh, Kar5nataka, Tamilnadu and Kerala. The focus was on collecting samples from remote tribal areas with limited access to Government laboratories. Based on the soil tests the farmers were educated on the agronomic practices to be adopted, namely crop variety selection, type of soil tillage to be adopted, use of available organics in fields, dosage of fertilizers to be used etc. These activities have benefited the farming community to maximize their crop yields. 5. Fire and Emergency Services The well equipped fire services established in FACT provide emergency services not only to the surrounding

No security deposit is collected from SC/ST Dealers and they are encouraged to do business by constant advice/follow up. All efforts will be made to ensure that maximum representation is given for SCs/STs in Dealer appointments wherever additional dealerships are provided. 7.9.8 Corporate Social Responsibility As part of Corporate Social Responsibility, FACT has undertaken the following activities. 1. Drinking Water Supply to Residents of Eloor Panchayath FACT processes water from the River Periyar at their advanced drinking water facility for their Industrial/township needs. To meet the scarcity of water in

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areas but also to Ernakulam district as well. 6. Training facilities In addition to Employees and Apprentices Training, FACT Training Centre has of late emerged as a Skill Development Academy offering the following courses, utilizing its resources for the benefit of the public at large: (a) One year Diploma in Fire & Safety Engineering for ITI/Plus 2 passed students-1 st batch started in February 2008. (b) 3 months Certificate course in Heavy Equipment Operation-1 st batch commenced on October 2008. (c) 3 months Certificate course in Instrumentation & Maintenance-1st batch commenced in September 2008.

is 17.29 lakh MT. The revamp of the plant is in advanced stage of implementation. Post revamp the Urea and Ammonia production capacity will increase to 21.95 lakh MT and 12.47 lakh MT respectively. KRIBHCO has also installed a Bio-fertilizer unit at Hazira in 1995. The capacity of this Unit was enhanced from 100 MTPA to 250 MTPA in 1998. Two more Bio-fertilizer 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 2004. As on 31.03.2010 the authorized share capital of the Society is Rs. 500 crore and the paid up share capital is Rs. 390.67 crore which includes Rs. 188.90 crore held by Government of India and remaining Rs. 201.77 crore held by Cooperative Societies. The total membership as on 31.03.2010 was 6546. 7.10.2 Physical Performance
PRODUCTIONKRIBHCO Ammonia Urea Bio-Fertilizer Capacity Ammonia Urea Bio-Fertilizer Lakh MT Lakh MT MT 10.03 17.29 550 10.03 17.29 550 10.03 17.29 550 Unit 2010-11 (upto Dec.10) 8.90 14.15 804 2009-10 2008-09

(d) Kerala Institute of Welding & Research, a Joint Venture with Government of Kerala, functioning at FACT Training Centre has started a 3 months Certificate course in Welding leading to award of IBR certificate in Welding. First batch commenced in September 2009. 7.9 Krishak Bharati Cooperative Limited (KRIBHCO)

Lakh MT Lakh MT MT

11.10 17.80 953

10.85 17.43 865

7.10.1 Introduction KRIBHCO was incorporated as a Multi State Cooperative Society on 17.04.1980 to implement the Ammonia/Urea fertilizer project at Hazira, based on natural gas from Bombay High/South Bassein. The Society commissioned its Ammonia/Urea Plant in 1985. The Hazira complex has two streams of Ammonia plants and four streams of Urea plants. The annual capacity of Urea Plants

CAPACITY UTILISATION % Ammonia Urea Bio-Fertilizer ENERGY CONSUMPTION Ammonia Urea Gcal/MT Gcal/MT 8.301 5.955 8.276 5.932 8.208 5.933 % % % 118.24 109.14 195.00 110.65 102.94 173.25 108.11 100.83 157.3

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7.10.3 Financial Performance PARTICULARS Unit 2010-11 (Upto Dec.10) 2596.14 200.31 22.42 14.08 163.81 39.18 124.63 390.28 2469.88 2860.16 2009-10 2008-09

TURNOVER/OPERATING INCOME Profit-(PBDIT) DEPRICIATION INTEREST Profit-(PBT) TAX PROFIT AFTER TAX SHARE CAPITAL RESERVES & SURPLUS NET WORTH

Rs. Crore Rs. Crore Rs. Crore Rs. Crore Rs. Crore Rs. Crore Rs. Crore Rs. Crore Rs. Crore Rs. Crore

2597.08 288.57 30.62 5.18 252.77 24.60 228.17 390.67 2306.46 2697.13

2559.12 307.25 27.53 10.38 269.34 19.21 250.13 390.67 2158.68 2549.42

7.10.4 Joint Ventures 1. Joint Venture Oman India Fertilizer Company, Oman (OMIFCO): KRIBHCO, IFFCO and Oman Oil Company with a share holding of 25%, 25% and 50% respectively have collaborated and set up a world-class fertilizer plant at Sur in Oman. The annual capacity of the fertilizer complex is 16.52 lakh MT of granular Urea and 11.9 lakh MT of Ammonia. The Urea produced in OMIFCO is being purchased by Govt. of India and half of the produce is being marketed by KRIBHCO. In addition, plant produces 2.5 lakh MT of surplus Ammonia per year, which is to be brought to India. During the financial year April 09 to March 10 OMIFCO has produced 20.30 Lakh MT of Granular Urea. 2.

During the financial year 2010-11 upto November 2010, OMIFCO has produced 14.11 Lakh MT of Granular Urea.

KRIBHCO Shyam Fertilizers Limited (KSFL): KRIBHCO Shyam Fertilizers Limited (KSFL) has acquired Ammonia Urea Fertilizer Complex of M/s. Oswal Chemicals and Fertilizers Ltd. at Shahjahanpur, U.P, consisting of a single stream Ammonia plant of annual capacity 5.02 Lakh MT and two streams of Urea plant with a combined annual capacity of 8.64 Lakh MT. KRIBHCO holds 85% of the equity, management control and the entire marketing rights of Urea and other products of the company. During the financial year 2009-10 KSFL achieved highest ever production of 9.73 lakh MT of Urea

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(113 % capacity utilization) and 5.72 Lakh MT of Ammonia (114 % capacity utilization). During the financial year 2010-11 upto November10, KSFL has produced 6.95 lakh MT of Urea (121 % capacity utilization) and 4.07 Lakh MT of Ammonia (122 % capacity utilization).

of NFCLs paid-up share capital of Rs.465.16 crore. 3. Indian Commodity Exchange Ltd. (ICEX) KRIBHCO has entered into Investor Share Subscription Agreement with IBFSL, MMTC and ICEX on 19.09.2009 for acquiring 5% equity stake at par in the above company. Accordingly, KRIBHCO has contributed Rs.5.00 crore as equity in ICEX. The upcoming exchange is a national level multi commodity exchange and has started its operation since 27.11.2009. 7.10.6 Project under consideration 1. implementation/

7.10.5 Equity Participation 1. Gujarat State Energy Generation Limited (GSEG): Gujarat State Energy Generation Limited (GSEG) is a joint venture with Gujarat State Petroleum Corporation Ltd (GSPC), other Government of Gujarat Companies, KRIBHCO and GAIL(India) Ltd. KRIBHCO has so far made equity contribution of Rs. 80.68 crore (27.48%). Further equity contribution of Rs.26.36 crore is likely to be made shortly. GSEG is operating a 156 MW Combined Cycle Power Plant based on Natural Gas at Mora, Distt. Surat, Gujarat. During the financial year 2009-10, Plant has achieved an overall Plant Load factor (PLF) of 81.3% GSEG is implementing Combined Cycle Gas Based Expansion Project of capacity 350 MW at its existing Site at an estimated cost of Rs.1160 crore. Erection work is in progress and the Project is likely to be completed in January 2011. GSEG has provisional post tax profit of Rs.9.72 Crore during the 2009-10 and has declared a dividend of 3 % on the share capital. 2. Nagarjuna Fertilizers & Chemicals Limited (NFCL): Society has an equity participation of Rs.10.00 crore in NFCL, which is 2.15%

Revamp of Ammonia and Urea Plant: Society is undertaking Revamp of its existing plant to augment its annual capacity of Urea Plant from 17.19 lakh MT to 21.95 lakh MT and of Ammonia Plants from 10.03 lakh MT to 12.47 lakh MT. Zero date for the project has been declared on 27th January 2010. The completion period of the project is 32 months with an estimated project cost of Rs.1301 Crore. Basic Engineering Job for both ammonia and urea has been completed. The Detail Engineering work and procurement services are under progress. Procurement of major equipments have been completed and orders for all long lead items have been placed, ITBs are being issued for procurement of Pipings and Fittings items as per MTO-2. Procurement deliveries have started arriving at site. The mechanical erection work is also in progress and orders for electrical and instrumentation erection contract has been placed, the contractors for both would also mobilize soon.

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KRIBHCO Bio-Fertilizer Plant at Hazira

2.

KRIBHCO Infrastructure Limited (KRIL): KRIBHCO has incorporated KRIBHCO Infrastructure Limited (KRIL), a 100% subsidy of KRIBHCO, with authorized share capital of Rs.500 crore for operating Container trains and undertaking Infrastructure Projects. KRIL has commenced Container trains operation w.e.f. December 2009. KRIL is presently having six Container rakes. KRIL is in an advanced stage of setting up Inland Container Depots (ICDs) at Rewari, Modinagar, Hindaun City and Shahjahanpur.

Terminal at Hazira. KRIBHCO would handle OMIFCO Urea and other fertilizers and gainfully utilize the rail/ road connectivity for evacuation to the rest of the country. A transit godown of capacity 15000MT has also been build. The evacuation potential from the jetty is about 7000MT per day. 7.10.7 Corporate Social Responsibility Agriculture income is the main strength of farmers. A large number of them are members of our member cooperatives. KRIBHCO with its large dedicated team of agriculture professionals continued its significant contribution along with other serious players in latest farm technology transfer and other rural welfare schemes for

3.

Revival of Jetty Terminal, Hazira: Society has revived its own Jetty

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improving the profitability of farming community. During 2009-10 , KRIBHCO organized more than 2786 programmes for our farming community such as farmers meetings, kisan melas, field demonstrations, field days, cooperative conferences, group discussion, special campaign etc. benefiting 12.72 lakh farmers and cooperatives across the country. To back up the Agriculture Technology transfer, the Society also made available 6.05 lakh technical folders on various crops to the farmers and cooperatives. KRIBHCO Krishi Pramarsh Kendra, a hightech centre at KRIBHCO Bhawan, NOIDA continued free consultancy to farm-related problems. The centre also propagated efficient and balanced use of fertilizer by testing 4240 soil samples collected scientifically for micro-nutrients and 1248 samples for macro-nutrients & irrigation water from 15 states free of cost. Results alongwith recommendations were forwarded through electronic medium to farmers at their doorsteps, apart from using KRIBHCO website for display of results. Pramarsh Kendra also provided latest information on weather, like rainfall, temperature, relative humidity, monsoon movement etc. for use in planning farm operations and mid-term corrections in the event of crop failure generally through kisan helplines. All State Director of Agriculture were informed about educational programmes conducted and soil samples tested from their states along with district-wise deficiency noticed in various soil samples. KRIBHCO also joined hands with ICAR, State Agriculture Universities, State Cooperative Federations for free soil testing and technology transfer which was thankfully acknowledged and appreciated at all platforms. As a step towards modernization, KRIBHCO continued to promote Information Communication Technology (ICT) through KRIBHCO Kisan helpline using e-mail,

phone, computer and KRIBHCO website for informing farmers about latest farm technology alongside with traditional tools. Information on monthly farm operations are also made available on website. Strengthening cooperatives and rural development always remained a top priority for KRIBHCO. In this direction 38 cooperative societies were adopted, 22525 cooperative managers were trained through 209 cooperative conferences and workshops and 30 study visits, wherein they were educated about the use of Societys product for improving farm productivity and also enhanced our corporate image. The society also organized 41 health campaigns for livestock and humans, promoted 6 water facilities including micro-irrigation systems for crops in rainfed areas and rural sports for integrated rural development. A group of Representative General Body(RGB) Members from Uttrakhand, Haryana, Karnataka, MP., Punjab, Rajasthan, Tamil Nadu, Maharashtra & Kerala, visited Hazira plant to apprise themselves of the steps taken to maintain the quality of the product. Storage-cum-community centre scheme started on Golden Jubilee celebration of India still continuing with 146 centres sanctioned and 131 are completed and being used fully. During the financial year 2010-11, KRIBHCO continued its services to farmers & cooperative. A total 1667 of programmes so far have been organized upto November 2010 which mainly include Farmers meetings, Cooperative conference, Health campaigns for human and animals, Technical wall paintings, Technical literature Printing & distribution and soil testing campaign, directly benefiting 2.20 lakh farmers. Besides this 4.36 lakh technical crop folders were distributed and 5004 Soil samples were tested for pH, Electric conductivity, macro and micro-nutrients from 104 districts of 13 states. KRIBHCO Kisan helpline was used by 277 farmers for solving their farm related problems.

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7.10.8 Seed Multiplication Programme KRIBHCO also initiated 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, Cooperative Societies and State Cooperative Federations in different states. The Society stepped up production of seeds from 2928 quintals in 1991-92 to 2.29 Lakh quintals of Seeds in 2009-10. This is the highest ever production of seeds so far. During the financial year 2009-10, the Society has produced 2.29 thousand quintals and sold 2.22 lakh quintals of seeds which is highest since inception. During the financial year 2010-11 upto November10, Society has already produced 2.35 lakh quintals and sold 2.32 lakh quintals. Grievance Redressal

and 8 PHPs on the rolls of the Company. 7.10.11 Gramin Vikas Trust Krishak Bharati Cooperative Ltd (KRIBHCO) has promoted Gramin Vikas Trust (GVT) as a non-profit, rural development trust. GVT as an independent legal entity is acting as a catalyst to enable the socially and economically disadvantaged rural and tribal communities to improve their livelihoods on sustainable basis. The prime focus of GVT is to empower the local and traditional people especially those in resource poor and Rainfed areas, through participatory approach. The Trust is operating in 7 states namely Madhya Pradesh, Rajasthan, Gujarat in the Western India and Orissa, Jharkhand, Chhattisgarh and West Bengal in the Eastern India through well established offices and team. It has also undertaken short term assignments like studies, evaluation work etc. in the state of Haryana, Maharastra, Uttarakhand and Bihar. GVT has been a pioneer in the field of collaborative research in agriculture with academic institutions and communities as partners. GVT and its projects have developed close links with Govt. of India, State Governments, NGOs, Research Institutions and international organizations for better dissemination of research outcomes and appropriate technology, which have potential value for the rural development. Partnerships are ongoing with EU and Centre for Arid Zone Studies (CAZS), Bangor University, U.K. GVT through its watershed projects has brought nearly 70000 hectares area for treatment and covered nearly 200000 Households in the targeted areas. Over the past decade participatory and more clientoriented approaches (through the concept of Participatory Varietal Selection- (PVS) and Participatory Plant Breeding (PPB) of GVT have produced officially released and recommended varieties that are highly adapted to the needs of farmers in marginal areas. The varieties have greater drought

7.10.9 Public/Staff Machinery

A Public Grievance Redressal Machinery is in operation in KRIBHCO. Grievance/ Complaint Box is kept at the reception of office for convenient registration of complaints by member of the public. DGM(HR), Corporate Office is designated as Grievance Officer to attend any public grievance/ complaint. A quarterly progress report of redressal of Public Grievance is being sent to Dept. of Fertilizers, Government of India. 7.10.10 Employment of SC/ST, Ex-Servicemen, Physically handicapped & Other Backward classes Persons (As on 30.11.2010) The guidelines regarding reservation in Recruitment and Promotion for SC, ST, OBC, Ex-Servicemen and Physically Handicapped Persons (PHP) are followed. Out of total strength of 2048, there are 92 SCs, 47 STs, 263 OBCs, 14 Ex-Servicemen

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tolerance; higher and more stable yields; and other traits that are important to farmers such as early maturity, high grain quality, and high fodder yields. Because the varieties substantially improve their livelihoods, farmers enthusiastically adopt these highly adapted varieties (HAVs) and spread the seed of them to other farmers. GVT has been piloting 5 agricultural innovation projects in its operating states in consortium mode either as lead agency or as a partner organization funded under NAIP. GVT is in the process of establishing 14 Homestead Farming projects (WADI) through funding by NABARD to address sustainable livelihood of marginal farmers by generating supplement income through horticulture, improved agriculture and vegetable growing in home gardens. In the area of skill development, GVT has made appreciable progress by providing skill up-gradation training to tribal migrants in order to up-grade their existing capacity, which will provide them, increased earnings. GVT has been awarded a Training project along with a Vocational Training Centre at Dahod, Gujarat by Government of Gujarat to train 5060 Tribal youth in construction industry related trades in 10 years period and to ensure their placement. GVT has developed strategic institutional partnerships with IRMA Anand, NIRD Hyderabad, WALMI Bhopal, ICRISAT, CAZS UK, TERI etc. MLSP is being replicated by NGOs in different parts of the country. GVT extensively worked in the HIV/AIDS prone area with a purpose of reducing STI infection among FSWs and enabling them to opt for safe sexual behaviour. GVT, due to its vast experience in rural development activities, is being associated

by Corporate like IOC, NTPC, ITC, CFCL etc. to outsource their CSR activities. GVT has undertaken a project under PublicPrivate-Community Partnership Model in Rajasthan where Govt. of Rajasthan, CFCL and GVT would implement a project of constructing 715 toilets at individual House Holds in 22 villages and to develop a cadre of Mason trained on construction of improved toilet through 5 days Training. A total of 715 families have been covered under this project. GVT has started a fully equipped and residential National Livelihood Resource Institute at Ratlam (M.P.) to provide quality inputs on the sustainable livelihood programmes through its various courses on Participatory watershed development and management; Participatory technology development addressing varied farming systems in arid and semi-arid regions; developing community based organizations to manage micro-finance and microenterprises on commercially viable scale, Capacity development of PRIs and other institutions to augment both rural non-farm and farm based livelihoods. GVT is running a Krishi Vigyan Kendra (KVK) at Godda, Jharkhand funded by ICAR. It has facilities for assessment, refinement and demonstration of agricultural technologies for promotion of various farming systems available in operational area. It has also training facilities on quality seed production of different cereal, leguminous, oilseeds, horticultural crops and promotion of the seed village programme. KVK is also wellequipped to provide training on production of bioagents, biofertilizers, biopesticide and other organic manures for promotion of organic farming.

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Chapter-8
8.1 Fertilizer Education Projects through judicious use of chemical fertilizers, secondary and micro nutrients coupled with organic and bio fertilizer for improving the soil health and crop productivity. It also aims at strengthening soil testing facilities, upgrading the skill of staff working in soil testing laboratory and strengthening the fertilizer quality control facilities. At present there are 651 soil testing laboratories in the Country including 517 static and 134 mobile laboratories having annual analyzing capacity of about 7 million soil samples. The above said national projects proposes to set up 500 new soil testing laboratories and 250 mobile soil testing laboratories for micro nutrient analysis. It also proposes to strengthening of 315 existing state static laboratory during the 11th Five Year Plan. It further proposes to upgrade 63 existing state fertilizer quality control laboratories and setting up of 20 new such laboratory plus 50 laboratories for advisory purposes. The total outlay of the project is 429.85 crore during the five year plan. A project sanctioning cum monitoring committee under the Chairmanship of Additional Secretary, Department of Agriculture & Cooperation has been constituted, which shall be advised by National Monitoring Team of Experts. The implementing agencies shall be agro-clinics, NGOs, Cooperative Societies, Private Entrepreneurs, State Governments. As per the above said scheme, the following amounts of subsidy is to be provided by Department of Agriculture & Cooperation for STL.

8.1.1 The basic purpose of the application of fertilizer is to enhance the crop productivity in the country. The Fertilizer companies launch their fertilizer projects for educating the farmers about the quality/contents of the soil for crops. Resultantly, the farmers are encouraged by the companies to use the balanced fertilizers based on the quality of the soil nutrient wise and apply fertilizers accordingly. Department of Fertilizers does not implement Fertilizer Education Projects. Such projects are administered by Department of Agriculture & Cooperation, ICAR, State Governments and the agriculture universities. However, some fertilizer companies including PSUs do undertake such projects as part of their extension and marketing activities. The PSUs under the Administrative control of Department of Fertilizers are encouraged to launch fertilizer education projects for the benefit of farming community as per the MOUs signed with the Department of Fertilizers in this regard. The main activities undertaken by various fertilizer companies under the Fertilizers Education Projects are agricultural seminars, dealers meetings and trainings, soil sample analysis, demonstration, soil test recommendations, exhibitions, orientation programmes, R&D trials, field trials of fortified fertilizers, bio fertilizers, distribution of crop literature, organizing Krishi Melas etc, media publicity. Department of Agriculture & Cooperation has launched National Project on Management of Soil Health and Fertility to promote integrated nutrient management

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Sl.No. Particulars 1. For Setting up of additional Soil Testing Laboratories by Agri clinics/NGOs /Cooperative, entrepreneurs, etc. under Private partnership mode. For Adoption of village by Soil Testing Laboratories through Frontline Field Demonstration. For Setting up of Mobile Soil Testing Laboratories by Agri Laboratories by Agri clinics/NGOs/Cooperative, Private entrepreneurs, etc. under Pvt. partnership mode. The following fertilizer companies have submitted their proposals to Department of Agriculture & Cooperation for setting up soil testing laboratory: FCI Arawali Gypsum and Minerals India Ltd. Krishak Bharati Cooperative Ltd. Mangalore Chemicals & Fertilizers Ltd. (MCF) Zuari Industries Ltd. (ZIL) Southern Petrochemical Industries Corporation Ltd. (SPIC) 8.1.3

Policy @50% of project cost limited to maximum of 30 lakh as one time subsidy. @ 20000 per Frontline Field Demonstration. @75% of project cost limited to maximum of 30 lakh as one time subsidy.

2. 3.

8.1.2

Gujarat Narmada Valley Fertilizers Company Ltd. Indian Potash Ltd. Rashtriya Chemicals & Fertilizers Ltd. GSFC. Indo Gulf NFL

Department of Agriculture & Cooperation has been requested by the Department to release subsidy to the above said fertilizers as per the policy.

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Chapter-9
9.1 9.1.1 Information Technology (IT) e-Delivery for Fertilizer Management Fertilizer Management On-line has been developed in Department of Fertilizers in close collaboration with National Informatics Centre to meet the national objective of making fertilizers available timely, adequately in good quality and at affordable price to the farmers by maintaining growth of fertilizer industry through subsidies/concessions. Proper planning and monitoring of various aspects like fertilizer production, imports, quality control, distribution, movement, sales, stocks, subsidies and concessions has been felt essential. In order to manage these issues effectively, the following applications systems have been developed/ upgraded in order to pace with the IT enhancements and change in fertilizer policy:9.1.2 Web Based Fertilizer Monitoring System Production amount based on the subsidy rates, equated freight rates and sales tax rates notified by the Government for the quantity moved by the Urea manufacturers to the consumption centers across the country. The processing of monthly claims through application system helps in timely release of subsidy to the urea manufacturers. The system helps in monitoring various activities pertaining to the payment of subsidy by generating various periodic reports as well as query retrieval. 9.1.4 Application System for Monitoring Energy Consumption Norms The system is used to calculate the overall energy consumption in urea production by plants based on various inputs and their calorific values purchased from various sources and consumed in ammonia production. The system provides information support to monitor operational performance of the plants viz., daily reassessed capacity, average productive hours, and daily production rate and capacity utilization of ammonia / urea. The system also maintains consumption and balance of ammonia for each quarter. 9.1.5 Application System for Revision in Urea Concession Rates The system facilitates in quarterly revision of concession rates for urea manufacturing units in each group under group concession scheme on account of escalation/deescalation in the variable cost of various inputs and utilities consumed in urea production. The software derives energy consumption proportions of various inputs w.r.t. the total normative energy and computes input wise proportional costs. The total input energy cost, normative costs of various utilities and fixed cost are then

The application system facilitates On-line data entry and provides information support for planning and monitoring the fertilizer production in the form of material as well as nutrients. The system provides analysis in identifying the macro and micro level factors responsible for deviations in production on plant to plant basis in order to take corrective measures to enhance fertilizer production in the country. The system covers various aspects viz., installed capacity, production targets, actual production, capacity utilization, requirement and consumption of raw materials/ intermediates for fertilizer plants. 9.1.3 Fertilizer Subsidy Payment Information System The system is used to compute the subsidy

74

summed to arrive at the rate of concession. The total financial impact is exercised w.r.t. the previous rate of concession and dispatched quantities. 9.1.6 Web Based Fertilizer Distribution and Movement Information System The system maintains the data related to ECA supply plan, fertilizer requirements in States/UTs, opening stocks with state institutional agencies and fertilizer companies, monthly movement orders, imports, dispatches (regulated/de-regulated/ imported by rail/road), availability and sales of different fertilizers. 9.1.7 Web Based Fertilizer Concession Scheme Monitoring System The computer based application system is the major integral process of Fertilizer Concession Scheme for timely release of concession payments to the fertilizer manufacturers and importers for the sales of indigenous/ imported phosphatic and potassic fertilizers in States/ UTs. The monthly claims at various stages i.e. On Account, Differential and Balance are processed using the software based on base/ final rates, registration for sales, bank guarantee, eligibility and sales certification. The computerized notings for approval and sanctions for payments to PAO, Expenditure and Control Register (ECR) and various queries/ reports are generated to make and monitor the concession payments. 9.1.8 Web Based Fertilizer Import Management System The system assists in monitoring the fertilizer Import Plan based on actual imports against targets, status of FOB and C&F import contracts for prilled urea on Govt. account under ECA demand and import of granular urea from OMIFCO under UOTA. The system also maintains details of Department of Fertilizers authorization to State Trading Enterprises (STEs)/ Handling & Marketing

Agents for import of urea during a scheduled period. 9.1.9 Web Based Handling & Payments System for Fertilizer Imports The application system provides decision support to the Department of Fertilizers in selecting handling agents, fixation of handling rates and monitoring of expenditure. The system processes the claims from handling/ marketing agents towards making payments of inland freight and handling charges after adjusting the recovery of cost of cargo at Pool Issue Price (PIP) from handling/ marketing agencies, settlement of the port dues/ICC/other charges and demurrage/ dispatch with handling/ marketing agencies. 9.1.10 Fertilizer Project Monitoring System The system facilitates in monitoring monthly expenditure incurred through Internal and Extra-budgetary Resources (IEBR) and Budgetary Support on various schemes/ projects approved by DoF during Five Year Plans w.r.t. plan outlays and yearly outlays. 9.2 Executive Video Conferencing System (EVCS) NICNET Based Executive Video Conferencing System (EVCS) has been made operational on the desk of Secretary, Department of Fertilizers and is being used as an effective mode of communication for inter-Ministerial consultations and quick decision making. Point-to-Point Video Conferencing can be initiated by anyone connected to EVCS and multi-point Video Conferencing can be organized through NIC, Delhi. 9.3 Information & Communication Technology (ICT) Infrastructure DoFs intranet consisting of 270 nodes is operational in Departments offices located in Shastri Bhawan, Udyog Bhawan, Janpath Bhawan and Sewa Bhawan. NICs iNOC (Integrated Network Operation Centres) at

75

Shastri Bhavan, Udyog Bhavan and Sewa Bhavan protect computer systems of DOFs intranet from network security attacks. The clients systems in the Department have been provided upto LDC level with internet connectivity to make wider use of IT services. For accessing the internet through RF link of NICNET, all the computers are connected through NICs proxy server where built-in firewall capabilities are enabled. 9.4 Web Site/ Web Applications Hosting The websites of DOF and fertilizer PSUs are hosted at Internet Data Center(IDC), NIC Hqrs. in a secured ICT environment to bring citizen interface and transparency in Government functioning. The web based applications for fertilizer production, movement, concessions payment, imports & handling are operational from IDC. The remote facility through secured Virtual Private Network (VPN) connection of NIC is being used in DOF and Fertilizer PSUs for instant updations in the websites. Cabinet Secretary to the Government of India directed all Government Ministries/ Departments to have their websites as per the guidelines adopted by DAR&PG. Accordingly, the website of Department of Fertilizers has been redesigned and enriched in order to make it compliant to the guidelines. The website has been made more qualitative, informative and user friendly to bring transparency in Government functioning and citizen interface. 9.5 IntraFERT Portal IntraFERT, an Intranet portal has been developed to provide comprehensive, accurate, reliable and one stop source of information to the staff and officers of the Department of Fertilizers. The portal aims in bringing less paper office environment in the department. It facilitates a common information platform whereby, all office orders, circulars, critical news-updates,

downloading of standard forms, telephone directory of DOF, electronic pay-slip generation, personal profile, GPF details, income tax statement etc. and links to useful websites are available equally and instantaneously to all employees. This eliminates the requirement of personal visits to HR, Cash and Administration Sections. 9.6 E-Governance Department of Fertilizers has taken various measures to bring e-Governance: Office Automation Packages: CompDDO (Comprehensive Function Management of Drawing & Disbursing Officer) Payroll System for Central Government Offices, Web based File Tracking System, Application Monitoring System under RTI Act, Leave Management System, PGRAMS (Public Grievances Software Package) and CPENGRAMS (Centralized Pension Grievance Redress And Monitoring System) developed by NIC are operational in the Department of Fertilizers. To strengthen further the Office Automation in Department of Fertilizers, an IT based system Office Notifications Management System has been developed and implemented to generate, store and manage different kinds of official letters viz. Office Memorandum, Letters, Office Orders, Orders, D.O. Letters, Resolutions, InterDepartmental Notes, Press Communiqus etc in compliance with Manual of Office Procedures (MOP). The facility of word processing in Hindi is available in all the computers in the Department. E-mail service is being extensively used by the officials of Department of Fertilizers for information exchange with fertilizer companies and other agencies.

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Chapter-10
10.1 Vigilance Activities The vigilance activities of the Department extend not only to the Department but also to that of 7 Public Sector Undertakings and 1 Multi State Cooperative Society. The departmental vigilance set up is headed by a Joint Secretary who is designated as the Chief Vigilance Officer of the Department. The CVO of the Department is assisted by a Deputy Secretary, Under Secretary and other vigilance staff. The Department supervises the vigilance activities within the framework provided by the Central Vigilance Commissioner (CVC). The Department plays a pro-active role in ensuring the prompt disposal of vigilance cases and in framing preventive guidelines. This helps in minimizing the occurrence of vigilance cases. Efforts are made by the Department to simplify the procedures in the PSUs to make them work in a transparent manner. This reduces the chances of corruption. 10.2 Vigilance Activities during 2010 The number of pending vigilance (Disciplinary Proceeding) cases in the PSUs was 25 as on 31.10.2010 as compared to 24 as on 31.10.2009. The Department has been regularly monitoring the pending complaints/investigations by having close inter-action with the concerned CVOs and constant efforts are being made to ensure the disposal of disciplinary proceedings. 10.5 10.3 Celebrations of Vigilance Awareness Period The Vigilance Awareness Period was celebrated during 25th October, 2010 to 1st November, 2010. Banners were displayed in the Department to create vigilance awareness among the staff. A pledge was administered to the officials of the Department by Secretary (Fertilizers) and an essay competition was held thereafter. There was active and enthusiastic participation of the officers and employees of the Department in this essay competition. The Vigilance Awareness Period was also celebrated with great gusto in the fertilizer PSUs and KRIBHCO and various competitions like slogan writing, essay, debate, quiz, workshops etc. were held. 10.4 Surveillance and Detection Agreed lists of public servants as well as the List of Public Servants of Doubtful Integrity for the year 2010 have been finalized. No cases were detected during the period 200910. Punitive Action As on 1st January 2010, twenty complaints from various sources against the officials of PSUs, were under examination. During the period from January, 2010 to 31st October, 2010, twenty five more complaints were received. A total of twelve were got investigated/examined and disposed off.

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Chapter-11
11.1 Right to Information Act, 2005 on RTI giving general information about the Department required under the Act. Orders designating PIOs, with required details, placed on website, which are up dated from time to time. Counter opened at Public Information Centre of DoF at Shastri Bhavan for applications as well as prescribed fee under RTI. Appointment of Nodal Officer intimated to Department of Post enabling providing of services by that Department as CAPIOs across the country. 11.1.3 The Department has started registration of Requests and Appeals under the RTI Act on the Management Information System (RTI RAMIS) software available on the Web-Site of CIC. 11.1.4 During the year 2010-2011, 112 applications and 5 appeals were received of which 101 applications and 5 appeal were disposed of during the said year and the remaining 11 applications are under process for sending reply to the applicants.

11.1.1 The Right to Information Act, 2005 (RTI) was 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 organization 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 October 2005. 11.1.2 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:Created a separate link for RTI Act on its website http://fert.nic.in placing a Handbook

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Chapter-12
12.1 Progressive use of official language Hindi 12.2 Implementation of Section 3(3) of the Official Language Act. 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 English and Hindi. In order to ensure 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. All the letters received in Hindi are invariably replied to in Hindi. Efforts are also being made to reply the letters in Hindi which are received in English from region A & B Original correspondence in Hindi with the state govt. is also being increased. 12.3 Official Language Committee (OLIC) Implementation

12.1.1 Department of Fertilizers continued its efforts towards greater use of Hindi in official work during 2010-2011 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 and one Assistant. 12.1.2 All the 275 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. All officers/employees of the Department, except one officer, who is being trained in Hindi through correspondence course, are having working knowledge of Hindi. Two stenographers, three Assistants and one lower Division Clerk of the Deptt. have been nominated for Hindi Shorthand and Hindi Typing. With the phasewise nomination of remaining six stenographers and three LDCs, all typists/ stenographers working in the Deptt., will be competent in doing their work in Hindi. Besides, a number of measures have been taken for the promotion of progressive use of Hindi in the Department, its attached office of FICC, PSUs and the multi state cooperative society namely KRIBHCO, under its administrative control. Details of these measures are summarized below:-

There is an Official Language Implementation Committee (OLIC) under the Chairmanship of Joint Secretary (Adm.) in the Department. This committee regularly reviews the progress made in the use of Hindi in the Department, its attached offices, FICC, PSUs and a Cooperative Society namely KRIBHCO on quarterly basis. It gives appropriate suggestions and recommends measures to be taken for the effective implementation of the official language policy. 12.4 Hindi Salahkar Samiti With a view to render advice for effective implementation of the official language policy of the Government, the reconstitution of the Hindi Salahkar Samiti (Advisory Committee) of the Ministry of Chemicals and Fertilizers (The joint committee of the Department of Chemicals, Deptt. of Pharmaceuticals and

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the Department of Fertilizer under the chairmanship of the Minister for Chemicals and Fertilizers was held on 10.2.2009) is under process. Draft resolution of the committee have been sent to the Department of Official Language for their approval/ sanction. 12.5 Incentive Scheme for original noting/ drafting work in Hindi The incentive scheme for noting/drafting in Hindi introduced by the Department of Official Language is continued. This scheme carries two prizes of Rs.1000/- each, three second prizes of Rs.600/- each and five third prizes of Rs.300/- each. 12.6 Cash prize scheme for dictation in Hindi An incentive scheme for officers for giving dictation in Hindi is in operation in the Department. Under this scheme, there is a provision of two cash prizes of Rs. 1000/each (one for Hindi speaking and other for Non-Hindi speaking). 12.7 Hindi Day/Hindi Fortnight 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, 2010. During the Hindi fortnight, which was organised in the Department from 14 th September, 2010 to 29th September, 2010, various competitions such as Hindi Essay writing, Hindi typing, short extempore speech in Hindi, noting and drafting in Hindi, Hindi general knowledge and poem recitation

competitions in Hindi were organised. Officers/employees took part very enthusiastically in these competitions and won prizes. 12.8 Prati Din Ek Shabd The Scheme named Prati Din Ek Shabd, which has been launched in the Department is continued for the last six years. Under this scheme, one word/phrase in Hindi and its English equivalent was being displayed on the White Board installed on the second floor A wing Shastri Bhavan. These words/ phrases are generally of administrative and technical in nature which are used in day-today official work. 12.9 Hindi Workshops During the year 3 Hindi workshops, one for Section Officers, one for Assistants and Stenographers and one for LDCs & UDCs, were organised in the Department to encourage the officials to do more and more work in Hindi and altogether 28 officers/ employees participated in these workshops. 12.10 Inspections regarding progressive use of Hindi In order to oversee the implementation of the official language policy seven sections of the Deptt. and offices/units of different PSUs were inspected by the Deputy Director (O.L.) of the Department during the year. In addition, the first Sub-Committee of the Parliamentary Committee on Official Language inspected six office under the administrative control of the Department.

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Chapter-13
13.1 Welfare of SCs, STs, OBCs and Physically Handicapped Persons. Due care has been exercised during the year under review to implement Governments instructions regarding recruitment and promotion of candidates belonging to the Scheduled Castes (SCs), Scheduled Tribe (STs), Other Backward Classes (OBCs) and Physically Handicapped (PHPs) categories in various groups of services in the Department. The representation of these categories in the Department as on date is as under:Group Total No. of Officers/ Staff 39 104 64 56 263 SC ST OBC PH 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 PSUs is given in the Annexure-XV. Besides providing employment, 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. 13.3 Welfare of Minorities

A B C D Total 13.2

02 13 10 18 43

01 06 03 02 12

02 07 09 06 24

01 01 02

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

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 Reservation in Dealership

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

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numbers of suitable SC/ST candidates, the following concession are generally given by the undertakings: exemption/relaxation from security deposits. preference in supply of fast moving materials.

higher rate of dealership margin as compared to that allowed to general dealers; and free training for handling of fertilizers.

13.4.2 The PSUs have also been advised to reserve 10% of fertilizer dealerships for ex-servicemen.

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Chapter-14
14.1 Women Empowerment 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 not 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 realize their full potential and involvement in decision making. Department of Fertilizers has a Complaints Committee 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. 14.2 RCF 14.2.2 All the welfare and employee benefit schemes are equally applicable to male and female employees of RCF. 14.2.3 Under the special schemes and policies for women employees, RCF has set up Special Cell for Women Employees (as per Communication from National Commission on Women) Committee for Sexual Harassment Cases (as per Supreme Court Guidelines) Special Medical check-ups/camps.

14.2.4 All the benefits under legal requirements such as Maternity Benefits, Nursing Breaks, etc. are given to women employees. 14.2.5 RCF is one of the pioneer members in the Forum of Women in Public Sector (WIPS) since its inception (1990). It is a corporate member of this forum and has been representing in all activities of the forum with total support and participation in all activities. Some RCF women officers have been working with the forum as heads of taskforces, members of committees and have contributed in policy making and development of women to a great extent. 14.2.6 As a part of regular training, RCF incorporates awareness building for all officers (Men and Women) on the Sexual Harassment Guidelines and also covers gender sensitization issues. 14.3 NFL

14.2.1 RCF as an organization has always been fair in treating employees without any gender bias. Opportunities for growth, training, challenging jobs, learning are equally available to both men and women employees of RCF. Women are represented in fair numbers in the last few batches of apprentice trainees in technical areas. 14.2.1 Women are working in technical / nontechnical / managerial positions and some of them have risen to the level of top management positions in the organization.

14.3.1 Efforts and initiatives taken by the individual PSUs / Cooperative for the Welfare, Development and Empowerment of Women and for mainstreaming gender issues.

83

14.3.2 Female employees comprise 5.26% of the total workforce of the Company. The Company has a female Full-time Functional Director on its Board. The Company has adopted adequate measures to facilitate a congenial work atmosphere for its women employees. 14.3.3 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. 14.4 MFL MFL do not have any problems related with gender issues. However, a wing of Women in Public Sector (WIPS) is functioning in MFL and women employees are nominated for the programs organized by WIPS. 14.5 BVFCL

14.6

FAGMIL As such, the company is a new Company and is engaged in the business of mining in the desert areas of Rajasthan. Suitable measures will be taken for the welfare and the empowerment of women and for mainstreaming gender issues.

14.7

KRIBHCO

14.7.1 The role of women employee in KRIBHCO has always been seen in more holistic term. Womens issues are well integrated in the total development endeavor. Women are provided equal opportunities with their counterpart keeping in mind the principles of equality in gender with respect to their working, development and growth. 14.7.2 The physical & mental growth and development of women employees in KRIBHCO are given special attention by imparting them specialized training and nominating in specialized women empowerment seminars and programmes. Female officers are equally associated in formulation of policies, be it promotion, recruitment policies or other matters of importance. 14.7.3 A Complaint Committee headed by a woman officer as its chairperson has been functioning to resolve their grievance, if any. In order to avoid any incidence of misconducts relating to harassment towards women employees, special provisions have been incorporated in the Conduct, Discipline & Appeal (CDA) Rules of the Society to prevent the same and protect the female employees.

14.5.1 BVFCL lays emphasis in development of employees without any gender discrimination. There is no discrimination against Women employees. Adequate healthcare provided for the welfare of the Women. 14.5.2 Emphasis is given at the time of recruitment and many women candidates have been recruited in recent past. As per the directives of the Controlling Ministry, a committee headed by a Lady Officer is constituted to address any problem related to sexual harassment. Till date no such case has been received.

84

Chapter-15
Citizen Charter/Grievance Redress Mechanism Citizen Charter Department of Fertilizer has created a Sevottam Compliant Citizens/Clients Charter for the year 2010-11 as well as Sevottam Compliant Grievance Redress Mechanism under Results Framework Document (RFD) of the Department. The Citizen Charter of Fertilizer Industries Coordination Committee (FICC), which is an attached office of Department of Fertilizers, is under preparation. Our Mission Achieving fertilizer security for the country for sustainable agricultural growth supported by a robust domestic fertilizer industry. Our Vision Ensuring adequate and timely availability of fertilizers to the farmers at affordable prices through planned production and imports and distribution of fertilizers in the country and planning for self-sufficiency in Urea production. Stake Holders The following are our stake holders: All PSUs/Cooperative under the Administrative Control of DoF All other Fertilizer Producing Companies Department Cooperation of Agriculture and Importers/Raw Material suppliers Other Ministries (Ministry of Finance, Ministry of Petroleum and Natural Gas, Ministry of Railways, Ministry of Surface Transport, Planning Commission, department of Public Enterprises, Public Enterprises Selection Board, Tariff Commission, DGFT etc. Farmers

Grievance Redress Mechanism With an objective of speedy redressal, effective monitoring of grievances, Department of Fertilizers (DoF) has implemented an integrated application system based on web-technology prepared and developed by Department of Administrative Reforms and Public Grievances and National Informatics Centre called Centralized Public Grievance Redress and Monitoring System (CPGRAMS) through which citizens can submit their grievances from anywhere and any time for easy communication between DoF and citizens. The system provides the on-line facility to the citizen to monitor the progress of redressal process in respect of grievance lodged by them. The system provides link between DoF and offices under its control. The grievances are forwarded to concerned division of DoF, its attached office and PSUs/ Cooperative Society under the control of the Department for action in a time-bound manner. Disposal of grievances is followed up by sending reminders at various levels at regular intervals. The grievances received by post are also properly recorded and redressed in a time bound manner.

State Governments Importers of Fertilizers (Urea, MOP, Complexes)

85

ANNEXURE - I LIST OF SUBJECTS ALLOCATED TO THE DEPARTMENT OF FERTILIZERS AS PER GOVERNMENT OF INDIA (ALLOCATION OF BUSINESS) RULES, 1961 1. 2. 3. 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 fertilizes. Administration of the Fertilizers (Movement Control) Order, 1960. Administrative responsibility for fertilizer production units in the cooperative sector, namely, Krishak Bharti Cooperative Limited. Administrative responsibility for the Indian Potash Limited (IPL).

4. 5. 6.

86

ANNEXURE - II (See Chapter-2) Minister for Chemicals & Fertilizers Minister of State for C&F Secretary : : : Shri M.K. Alagiri Shri Srikant Kumar Jena Shri S. Krishnan (upto 31.08.2010) Dr. Sutanu Behuria (w.e.f. 01.09.2010) Additional Secretary & Financial Adviser Joint Secretary : : Dr. V. Rajagopalan (w.e.f. 23.04.2010) Shri Sham Lal Goyal (w.e.f.28.06.2010) Shri Satish Chandra Shri Deepak Singhal Joint Secretary Level Officers : : Shri A.K. Parashar, Economic Adviser Shri B.N. Tiwari, DDG (upto 25.05.2010) Shri M.P. Johnson, DDG (w.e.f. 24.05.2010) Directors : Shri Deepak Kumar Shri B.B. Mehtani Shri Gautam Chaterjee (w.e.f. 03.01.2011 to 31.01.2011) Shri Manoj Kumar Gupta (upto 30.06.2010) Director Level Officer : Shri M. Dandayudhapani (FICC) (upto 04.11.2010) Shri Pradeep Yadav, PS to Minister (C&F) (upto 30.06.2010) Smt. T.C.A Kalayaani (Director of Accounts) Shri T.A. Basil (FICC) Shri Umesh Dongre (FICC) Shri A.S. Sandhu (FICC)

87

Deputy Secretary

Shri Sanjay Kumar Sinha Shri H. Abbas Shri K.K. Padmanabhan (upto 31.12.2010) Shri Manish Tripathi (w.e.f. 31.05.2010) Smt. Lalitha Das (w.e.f. 27.08.2010) Shri Rajiva Kumar (w.e.f. 03.01.2011) FICC Shri R. Selvam, PS to Minister (w.e.f.01.07.2010) Shri Tapan Dutta, DC (POP)

Controller of Accounts Deputy Secretary Level Officer

: :

Shri Akhilesh Jha Shri A.K. Chandwani, Sr. PPS

88

ANNEXURE - III LIST OF PUBLIC AND COOPERATIVE SECTOR UNDERTAKINGS UNDER THE ADMINISTRATIVE CONTROL OF DEAPRTMENT OF FERTILIZERS PUBLIC SECTOR : Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. Name of the Company Fertilizers And Chemicals Travancore Ltd. (FACT) Fertilizer Corporation of India Ltd. (FCI) National Fertilizers Limited (NFL) Rashtriya Chemicals & Fertilizers Ltd. (RCF) Madras Fertilizers Limited (MFL) Projects & Development India Limited (PDIL) Hindustan Fertilizer Corporation Limited (HFC) Brhamaputra Valley Fertilizer Corporation Limited (BVFCL) FCI Aravali Gypsum And Minerals India Limited (FAGMIL) Headquarters Incorporation in

Udyogamandal September, 1943 New Delhi Noida Mumbai Chennai Noida New Delhi Guwahati Jodhpur January, 1961 August, 1974 March, 1978 December, 1966 March, 1978 March, 1978 April, 2002 February, 2003

COOPERATIVE SECTOR : 10 Krishak Bharati Cooperative Limited (KRIBHCO) Noida April, 1980

89

ANNEXURE-IV UNIT-WISE INSTALLED CAPACITY, PRODUCTION AND CAPACITY UTILIZATION FOR THE YEAR 2009-10 & 2010-11 NITROGEN
Name of Company/Plant Name of Products Annual Installed Capacity (As on 1-04-09) (in 000 MTs) Production (000 MT) 2009-2010 Percentage capacity utilization

2010-11 2009-2010 2010-2011 (Estimated) (Estimated) 206.6 243.4 211.2 413.5 433.8 1508.5 35.8 84.5 120.3 59.7 95.7 155.4 66.2 35.0 157.0 810.3 1068.5 216.2 0.0 18.9 3087.8 282.3 273.7 337.8 470.0 434.8 479.7 312.4 2590.7 843.8 3434.5 6522.3 99.0 100.6 100.3 101.6 109.8 103.1 33.0 73.2 55.8 93.8 119.0 107.8 163.6 3.5 93.0 104.4 98.1 54.7 0.0 49.2 89.2 86.6 110.4 131.1 115.7 115.7 115.7 89.8 108.9 102.9 107.4 97.8 93.9 103.4 89.8 104.0 109.1 101.5 32.4 58.3 47.1 77.5 98.7 89.3 147.1 46.6 103.4 103.2 101.1 59.0 0.0 49.2 88.3 80.3 109.3 133.3 118.2 109.3 120.6 96.1 109.1 106.1 108.4 97.8

Public Sector: NFL:Nangal-II NFL:Bhatinda NFL:Panipat NFL:Vijaipur NFL:Vijaipur Expn. TOTAL (NFL): BVFCL:Namrup-II BVFCL:Namrup-III TOTAL (BVFCL): FACT:Udyogamandal FACT:Cochin-II TOTAL (FACT): RCF:Trombay RCF:Trombay-IV RCF:Trombay-V RCF:Thal TOTAL (RCF): MFL:Chennai SAIL:Roulkela By Product Total (Public): Cooperative Sector IFFCO:Kandla IFFCO:Kalol IFFCO:Phulpur-I IFFCO:Phulpur-II IFFCO:Aonla-I IFFCO:Aonla-II IFFCO:Paradeep TOTAL(IFFCO): KRIBHCO:Hazira Total (Co-operative): Total (Pub.+Coop.): Urea 10:26:26 / 12:32:16 / DAP Urea Urea Urea Urea Urea DAP / 10:26:26 / 20:20 / 12:32:16 351.5 250.5 253.5 397.7 397.7 397.7 325.2 2373.8 795.4 3169.2 6666.7 304.5 276.6 332.4 460.0 460.1 460.1 291.9 2585.6 818.6 3404.2 6522.4 Urea / 17:17:17 CAN A/S 15:15:15 20.8:20.8, 20:20 Urea Urea A/S , 20:20 20:20 Urea Urea Urea Urea Urea Urea Urea 220.1 235.3 235.3 397.7 397.7 1486.1 110.4 144.9 255.3 77.0 97.0 174.0 45.0 75.1 151.8 785.1 1057.0 366.7 120.0 38.4 3497.5 218.0 236.8 235.9 404.1 436.8 1531.6 36.4 106.0 142.4 72.2 115.4 187.6 73.6 2.6 141.2 819.8 1037.2 200.5 0.0 18.9 3118.2

90

Name of Company/Plant

Name of Products

Annual Installed Capacity (As on 1-04-09) (in 000 MTs)

Production (000 MT) 2009-2010

Percentage capacity utilization

2010-11 2009-2010 2010-2011 (Estimated) (Estimated) 231.2 69.9 73.3 143.2 348.0 477.3 233.1 45.6 219.1 175.5 0.0 263.6 166.9 227.4 8.3 82.9 513.1 39.5 33.8 389.9 379.0 768.9 468.9 491.1 960.0 507.3 202.9 5.3 5652.9 12175.2 96.8 68.3 131.4 93.7 94.1 112.5 178.2 82.5 155.2 100.9 0.0 98.1 9.4 109.6 0.0 60.2 126.8 45.4 43.7 126.7 121.0 123.9 117.9 117.0 117.5 142.5 159.8 50.7 100.0 98.8 93.2 66.1 102.8 80.9 97.6 120.0 188.0 110.7 181.7 100.7 0.0 91.3 45.0 109.7 51.9 68.2 129.0 54.9 63.9 141.9 137.9 139.9 117.9 123.5 120.7 127.6 156.6 70.7 105.1 101.1

Private Sector GSFC:Vadodara GSFC:Sikka-I GSFC:Sikka-II TOTAL(GSFC-Sikka): GNFC:Bharuch KSFL:Shahjahanpur CFL:Vizag CFL:Ennore CFL:Kakinada SFC:Kota DIL:Kanpur ZIL:Goa SPIC:Tuticorin MCF:Mangalore TAC:Tuticorin TCL:Haldia IGCL:Jagdishpur Hin.Ind.Ltd.:Dahej DFPCL:Taloja NFCL:Kakinada-I NFCL:Kakinada-II TOTAL(NFCL): CFCL:Gadepan-I CFCL:Gadepan-II TOTAL(CFCL): TCL:Babrala PPL:Paradeep By Product Total (Private Sector): Total (Pub+Coop+Pvt): Urea DAP / 14:35:14 / 20:20 / 12:32:16 / 10:26:26 / 28:28 A/S Urea Urea Urea / CAN / 20:20 Urea 28:28 / 14:35:14 / 20:20 / 16:20 / 10:26:26 16:20 / 20:20 DAP / 10:26:26 / 20:20 / 14:35:14 / 12:32:16 Urea Urea Urea / DAP / 19:19:19 / 10:26:26 / 12:32:16 Urea / DAP / 20:20 / 17:17:17 Urea / DAP / 20:20 / 16:20 A/C DAP / 10:26:26 / 12:32:16/ 14:35:14 / 15:15:15 Urea DAP / 10:26:26 / 12:32:16 23:23 Urea Urea Urea / DAP / 20:20 / A/S DAP / 12:32:16 DAP / 12:32:16 248.1 105.8 71.3 177.1 356.7 397.7 124.0 41.2 120.6 174.3 332.1 288.7 370.7 207.2 16.0 121.5 397.7 72.0 52.9 274.8 274.8 549.6 397.7 397.7 795.4 397.7 129.6 7.5 5378.3 12045.0 240.1 72.3 93.7 166.0 335.7 447.5 221.0 34.0 187.2 175.8 0.0 283.2 34.9 227.0 0.0 73.1 504.2 32.7 23.1 348.2 332.6 680.8 469.0 465.2 934.2 566.6 207.1 3.8 5378.0 11900.4

91

PHOSPHATE
Name of Company/Plant Name of Products Annual Installed Capacity (As on 1-04-09) (in 000 MTs) Production (000 MT) 2009-2010 Percentage capacity utilization

2010-11 2009-2010 2010-2011 (Estimated) (Estimated) 29.8 95.7 125.5 66.2 35.0 101.2 10.7 0.0 237.4 740.2 550.3 1290.5 1527.9 55.5 179.0 187.4 366.4 35.5 281.5 56.4 556.4 230.9 87.2 105.9 224.2 100.9 33.8 437.6 432.0 3004.2 4532.1 122.2 119.0 119.7 163.6 3.5 63.4 0.0 0.0 56.6 86.8 50.4 69.7 67.2 77.2 68.3 131.4 93.7 116.8 157.7 88.5 154.0 133.6 16.0 130.3 60.6 45.4 43.7 137.4 41.9 82.5 76.8 100.3 98.7 99.1 147.1 46.6 84.3 7.5 0.0 59.0 81.3 68.5 75.3 72.2 73.1 66.2 102.9 80.9 89.2 169.6 117.5 180.5 117.0 39.9 127.9 66.5 54.8 63.9 132.1 41.9 85.5 80.5

Public Sector: FACT:Udyogamandal FACT:Cochin-II Total (FACT): RCF:Trombay RCF:Trombay-IV Total (RCF): MFL:Chennai SSP Units Total (Public): Cooperative Sector IFFCO:Kandla IFFCO:Paradeep Total (Co-op.) Total (Pub.+Coop.): Private Sector GSFC:Vadodara GSFC:Sikka-I GSFC:Sikka-II TOTAL (GSFC-Sikka): GNFC:Bharuch CFL:Vizag CFL:Ennore CIL:Kakinada ZIL:Goa SPIC:Tuticorin MCF:Mangalore TCL:Haldia Hin.ind.Ltd.:Dahej DFPCL:Taloja PPL:Paradeep SSP Units Total (Private Sector): Total(Pub+Coop+Pvt): 20:20 14:35:14 / 28:28 / 10:26:26 / 20:20 16:20 / 20:20 DAP / 12:32:16 / 20:20 / 14:34:14 / 10:26:26 DAP / 19:19:19 / 10:26:26 / 12:32:16 DAP / 17:17:17 / 20:20 DAP / 20:20 / 16:20 DAP / 10:26:26 / 12:32:16/ 14:35:14 DAP / 10:26:26 / 12:32:16 23:23 DAP / 14:35:14 / 20:20 / 12:32:16 / 10:26:26 / 28:28 SSP DAP / 20:20 DAP , 12:32:16 DAP 75.9 270.5 182.2 452.7 28.5 166.0 48.0 308.2 197.4 218.5 82.8 336.9 184.0 52.9 331.2 1030.6 3513.6 5628.8 58.6 184.7 239.4 424.1 33.3 261.7 42.5 474.6 263.8 34.9 107.9 204.0 83.6 23.1 455.0 432.0 2899.1 4321.1 DAP / 10:26:26 / 12:32:16 DAP / 10:26:26 / 20:20 / 12:32:16 910.0 802.8 1712.8 2115.2 789.5 404.6 1194.1 1422.0 20:20 / 19:19:19 / 17:17:17 SSP 15:15:15 20.8:20.8/ 20:20 20:20 20:20 29.7 97.0 126.7 45.0 75.1 120.1 142.8 12.8 402.4 36.3 115.4 151.7 73.6 2.6 76.2 0.0 0.0 227.9

* Actual figures have been considered from April 2010- November 2010 and estimated for December 2010 to March 2011 * Estimated Production figures have been reported for the year 2010-11.

92

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

(lakh M.T.) YEAR N 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 40.69 42.24 52.86 54.87 56.61 57.16 57.17 72.51 73.86 79.97 80.46 84.27 87.89 95.07 98.23 103.01 109.01 113.54 115.92 109.20 113.10 104.74 110.76 117.14 127.23 137.74 144.19 150.90 155.80 N.A CONSUMPTION P 13.22 14.37 17.07 18.86 20.05 20.79 21.87 27.21 30.14 32.21 33.21 28.44 26.69 29.31 28.98 29.77 39.14 41.12 47.99 42.15 43.82 40.19 41.24 46.24 52.04 55.43 55.15 65.06 72.74 N.A K 6.73 7.27 7.99 8.38 8.08 8.50 8.80 10.68 11.68 13.28 13.61 8.84 9.08 11.25 11.56 10.30 13.73 13.32 16.78 15.67 16.67 16.01 15.98 20.61 24.13 23.34 26.36 33.13 36.32 N.A TOTAL 60.64 63.88 77.92 82.11 84.74 86.45 87.84 110.40 115.68 125.46 127.28 121.55 123.66 135.63 138.77 143.08 161.88 167.98 180.69 167.02 173.59 160.94 167.98 183.99 203.40 216.51 225.70 249.09 264.86 N.A N 31.44 34.24 34.85 39.17 43.28 54.10 54.66 67.12 67.47 69.93 73.01 74.30 72.31 79.45 87.77 85.99 100.86 104.80 108.90 109.61 107.68 105.64 106.34 113.38 113.54 115.78 109.00 108.7 119.0 80.21 PRODUCTION* P 9.49 9.80 10.48 12.64 14.28 16.60 16.65 22.52 17.96 20.52 25.62 23.06 18.16 24.93 25.58 25.56 29.76 31.41 33.99 37.43 38.60 39.10 36.32 40.67 42.21 45.17 38.07 34.64 43.21 29.52 K 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 TOTAL 40.93 44.04 45.33 51.81 57.56 70.70 71.31 89.64 85.43 90.45 98.63 97.36 90.47 104.38 113.35 111.55 130.62 136.21 142.89 147.04 146.28 144.74 142.66 154.05 155.75 160.95 147.07 143.34 162.21 109.73 N 10.54 4.25 6.56 20.08 16.80 11.03 1.75 2.19 5.23 4.14 5.66 11.37 15.88 14.76 19.93 11.67 13.62 6.35 8.33 1.54 2.69 0.66 1.32 4.09 13.85 26.88 36.77 38.44 34.47 34.48 IMPORTS** P 3.43 0.63 1.43 7.45 8.16 2.55 0.00 4.07 13.11 10.16 9.67 6.89 7.22 3.80 6.47 2.46 6.72 9.68 15.03 3.96 4.29 1.70 3.38 2.96 11.21 13.23 12.53 29.27 27.56 35.15 K 6.44 6.44 5.56 8.71 9.03 9.52 8.09 9.82 12.80 13.28 12.36 10.82 8.57 11.09 13.15 6.13 11.40 15.42 17.39 15.41 17.01 14.38 15.48 20.45 27.47 20.69 26.53 33.80 29.44 30.22 TOTAL 20.41 11.32 13.55 36.24 33.99 23.10 9.84 16.08 31.14 27.58 27.69 29.08 31.67 29.65 39.55 20.26 31.74 31.45 40.75 20.91 23.99 16.74 20.18 27.50 52.53 60.80 75.83 101.51 91.47 99.85

* Actual figures have been considered from April 2010- November 2010 ** Provisional Import figures are reported upto 30.11.2010

93

ANNEXURE - VI SECTOR-WISE PRODUCTION OF NITROGENOUS AND PHOSPHATIC FERTILIZERS (See Chapter - 5)

(000 MT) 2002-03 Target Actual Target Actual Target Actual Target Actual Target Actual Target Actual Target Actual Target 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 Actual 2010-11 Target Estimated

94
3366.7 2699.5 5549.1 4906.5 5401.9 5130.5 5502.0 5382.5 5837.0 5437.6 5224.9 5526.9 5485.0 4982.0 5583.6 2800.9 2672.7 2797.3 2812.3 2901.7 2832.5 2958.3 3106.4 3004.3 3303.4 3031.0 3260.7 2854.1 3106.2 3007.9 3091.5 3051.0 3141.8 2958.6 3117.0 3046.7 3119.7 2887.0 3053.5 2925.2 3133.0 4811.5 3054.8 3280.8 5749.0 3118.1 3404.3 5379.6 3124.7 3363.5 6027.8 3088.1 3434.5 5652.9 678.9 776.0 3364.2 4819.1 3904.2 4640.6 3800.4 4925.9 4067.3 4663.0 4221.3 2647.3 3464.8 2668.4 3648.1 2862.7 3400.0 2890.6 2972.0 4820.8 949.5 776.0 778.7 875.1 938.3 880.0 1035.8 1461.5 1129.7 3154.8 4517.2 307.4 399.8 353.3 402.7 266.3 383.0 294.9 387.3 232.7 234.0 1496.2 3184.2 4914.4 161.4 969.2 2676.7 3807.3 241.8 1104.8 3087.7 4434.3 191.7 916.2 2356.4 3464.3 207.3 937.0 2986.8 4131.1 227.7 1194.1 2901.1 4322.9 271.7 1242.2 3355.6 4869.5 237.5 1290.5 3004.1 4532.1

Nutrient

2001-02

Target

Actual

Nitrogen (N)

Public Sector 3429.9

2879.5

Co-operative Sector

2706.1

2691.8

Private Sector

5523.0

5196.7

Total (Nitrogen):

11659.0 10768.0 11615.3 10561.5 11180.8 10935.7 11405.8 11335.2 11811.3 11354.5 11448.3 11577.9 11908.1 10900.0 11897.8 10869.7 12084.6 11902.0 12516.0 12175.5

Phosphate(P)

Public Sector

749.3

479.4

Co-operative Sector

776.0

793.3

Private Sector

3404.7

2587.3

Total (Phosphate):

4930.0

3860.0

Grand Total: 16589.0 14628.0 16434.4 14465.7 15821.4 14736.1 16331.7 15402.5 16474.3 15575.8 16269.1 16095.1 16822.5 14707.3 16332.1 14334.0 16215.7 16224.9 17385.5 16707.6

* Estimated Production figures have been reported for the year 2010-11.

ANNEXURE-VII SECTOR-WISE CAPACITY UTILIZATION OF NITROGENOUS AND PHOSPHATIC FERTILIZERS (See Chapter - 5) (%age) Nutrient Nitrogen(N) Public Sector: Co-operative Sector: Private Sector: Total(Nitrogen): Phosphate(P) Public Sector: Co-operative Sector: Private Sector: Total(Phosphate): 58.3 141.4 69.6 75.7 64.8 131.0 63.6 72.8 81.7 94.4 64.1 70.1 61.6 103.1 66.3 71.9 68.2 60.5 82.3 74.6 53.8 60.5 89.8 79.8 37.3 60.5 76.2 67.3 44.3 53.5 67.1 61.2 56.6 69.7 82.5 76.8 59.0 75.3 85.5 80.5 74.1 101.0 95.0 89.6 78.9 101.0 85.8 87.2 86.7 99.5 89.7 91.1 87.2 102.0 94.1 94.0 84.6 93.3 100.8 94.1 87.1 94.8 102.5 96.0 82.5 95.6 92.4 90.4 83.6 98.9 89.5 90.2 89.2 107.4 100.0 98.8 88.3 108.4 105.1 101.1 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

95

ANNEXURE-VIII Annual Plan 2011-2012 Department of Fertilizer

(Rs. crores) S.No. Name of the Scheme Annual Plan 2009-10 (Actuals) GBS IEBR Total Annual Plan 2010-11 (BE) GBS IEBR Total GBS Annual Pan 2010-11 (RE) IEBR Total Outlay GBS Earmarked for NER Annual Pan 2011-12 (BE) IEBR Total Outlay Earmarked for NER

Centally Sponsored Schemes-CSS Total CSS Central Sector Scheme(CS) 1 2 3 4 5 6 6(i) 6(ii) 6(iii) 6(iv) 6(v) 6(vi) 7 8 9 10 RCF FAGMIL PDIL NFL KRIBHCO Revival of Sick CPSEs BVFCL FACT MFL FCI HFC PPCL Misc. Schemes (MIS/IT and R&D) Capital Subsidy for conversion Investments for JVs abroad# Revival of Closed Units Total CS 199.67 511.57 711.24 215.00 2699.99 2914.99 215.00 2047.05 2262.05 225.00 3325.22 3996.73 0.00 0.00 0.01 0.01 0.01 0.01 0.01 0.01 3.68 3.68 5.50 65.00 34.00 96.99 65.00 34.00 96.99 141.02 141.02 0.37 7.52 43.05 0.37 7.52 43.05 622.82 622.82 11.29 5.38 900.5 11.29 5.38 900.5 237.37 237.37 5.89 9.45 5.89 9.45 293.30 293.30 4.15 9.73 4.15 9.73

655.71 655.71 1138.63 1138.63

2363.08 2363.08 654.96 654.96

319.61 319.61 0.00 45.00 89.99 74.50 0.00 0.00

1160.00 1160.00 0.00 45.00 89.99 74.50 0.00 0.00 0.00 5.50 5.50 45.00 89.99 74.50 0.00 0.00

45.00 89.99 74.50 0.00 0.00

67.80 60.74 88.95

134.00 120.00 410.00

5.50

7.50

7.50

* The amount earmaked for BVFCL will be utilised for the benefits of North-East Region # DOF is exploring possibilities of JV abroad. Since no firm proposal is at hand right now only a token amount of Rs. 1 Lakh has been provided.

96

ANNEXURE-IX DETAILS OF HEAD-WISE ALLOCATION OF FUNDS UNDER NON-PLAN AND PLAN FOR BE 2010-11 and RE 2010-11
(Rs In Crore) I A NON-PLAN PROVISIONS: REVENUE SECTION 1. Sectt. Proper (MH 3451) 2. Office of FICC & other Programmes (FICC+MIT) (MH 2852) 3. Subsidy on Nitrogenous Fertilizers (MH 2852) Indigenous Urea including Frieght Subidy (Gross) 4. Subsidy on Imported Fertilizers (MH 2401) Gross Recovery(-) Net 5. Payment to Manufacturers/ Agencies for concessional sale of Decontrolled Fertilizers (MH 2401) (i) Indigenous Decontrolled Fertilizers (Gross) (ii) Imported Decontrolled Fertilizers (Gross) Total (Decontrolled Fertilizers)-(Gross) 6. Write off of loans, interest and penal interest on GOI loan outstanding against HFCL, FCI, MFL, PDIL and FACT (MH 3475) 7. Post closure adjustment liabilities of PPL (MH 3475) TOTAL : (REVENUE SECTION) Gross Net B. CAPITAL SECTION Non-Plan loans to PSUs (MH 6855) HFC FCI PPCL BVFCL FACT TOTAL (CAPITAL SECTION) TOTAL : NON-PLAN Gross Net 0.01 0.01 0.01 0.01 0.04 52860.00 50000.00 0.01 0.01 0.01 0.01 0.04 57860.00 55000.00 13000.00 15500.00 28500.00 0.01 0.01 52859.96 49999.96 17000.00 16500.00 33500.00 0.01 4.06 57859.96 54999.96 8360.00 2860.00 5500.00 9255.95 2860.00 6395.95 15980.73 15080.73 17.24 1.97 17.24 1.97 BE 2010-11 RE 2010-11

97

II A.

PLAN PROVISIONS: REVENUE SECTION 1. Grant to PDIL for R&D 2. S&T Programme of Department (MH 2852) 3. Grant in the field of Management Information Technology (MH 2852) 4. Capital subsidy for conversion of 4 existing FO/LSHS Plants to NG/LNG (MH 2852) TOTAL (REVENUE SECTION) 2.00 3.50 0.00 5.50 2.00 3.50 0.00 5.50

B.

CAPITAL SECTION : Investment in and loans to PSUs (MH 6855) 1. FACT 2. BVFCL 3. HFC 4. PDIL 5. MFL 6. FCI 7. PPCL Investments for JVs abroad (MH 4855) TOTAL (CAPITAL SECTION) TOTAL PLAN TOTAL-DEPARTMENT OF FERTILIZERS (Gross) TOTAL-DEPARTMENT OF FERTILIZERS (Net) 89.99 45.00 74.50 0.01 209.50 215.00 53075.00 50215.00 89.99 45.00 74.50 0.01 209.50 215.00 58075.00 55215.00

98

ANNEXURE-X MONTHLY FINAL RATES OF CONCESSION FOR ANNOUNCEMENT FOR APRIL 2009 TO MARCH 2010. (Rs. per MT) Fertilizers April Indigenous & Imported DAP Indigenous & Imported MAP Indigenous & Imported TSP MOP 12890 10226 9470 29002 May 12144 11963 8981 27970 June 10167 7948 8729 27418 July 8893 8893 8307 27486 2009 Aug 8499 8499 7333 19442 Sept 9244 9085 7197 19474 Oct 9765 9765 5543 18585 Nov 9724 9724 5503 18515 Dec 8961 7915 5513 18636

Fertilizers Jan Indigenous & Imported DAP Indigenous & Imported MAP Indigenous & Imported TSP MOP 8393 7681 5340 18287

2010 Feb 11840 7803 5431 18545 March 15868 7677 5338 18260

99

Fertilizers Complex Fertilizers I 15-15-15-0 17-17-17-0 19-19-19-0 20-20-0-0 23-23-0-0 28-28-0-0 10-26-26-0 12-32-16-0 14-28-14-0 14-35-14-0 16-20-0-13 20-20-0-13 10-26-26-0 (CFL Vizag/ HIL, Dahej) 12-32-16-0 (HIL Dahej) 14-35-14-0 (CFL Vizag) 20-20-0-13 (IFFCO- P) 13731 15102 16571 7488 8155 9269 21237 17625 15874 17300 7082 7158

April 2009 Groups II 15398 17064 18829 9893 11003 12856 22165 18849 17393 18819 8896 9563 III 15686 17444 19301 10412 11660 13744 22222 18998 17635 19061 9231 10082 IV 13524 14998 16569 7538 8358 9729 20773 17264 15616 17042 6926 7208 20724 I 13129 14420 15808 7033 7633 8632 20192 16619 14993 16261 6664 6740

May 2009 Groups II 14934 16539 18241 9623 10694 12778 21213 17953 16641 17909 8626 9330 III 14769 16406 18139 9537 10656 12519 20968 17740 16460 17728 8477 9244 IV 13171 14598 16122 7415 8219 9558 19894 16457 14967 16235 6774 7122 19845 I 12397 13590 14881 6235 6714 7514 18924 15199 13751 14739 5843 5919

June 2009 Groups II 14588 16146 17803 9339 10336 12080 20202 16842 15759 16747 8217 9023 III 13819 15328 16936 8448 9402 10994 19554 16146 15014 16002 7423 8132 IV 12322 13636 15047 6461 7121 8221 18549 14944 13616 14604 5828 6145 18500

17215 16993 9361

16408 16186 9275

14895 14555 8298

Fertilizers Complex Fertilizers I 15-15-15-0 17-17-17-0 19-19-19-0 20-20-0-0 23-23-0-0 28-28-0-0 10-26-26-0 12-32-16-0 14-28-14-0 14-35-14-0 16-20-0-13 20-20-0-13 10-26-26-0 (CFL Vizag/ HIL, Dahej) 12-32-16-0 (HIL Dahej) 14-35-14-0 (CFL Vizag) 20-20-0-13 (IFFCO-P) 12214 13383 14650 5968 6407 7141 18607 14791 13394 14288 5578 5654

July 2009 Groups II 14798 16384 18069 9596 10661 12440 20146 16748 15769 16663 8370 9282 III 13478 14943 16506 7971 8854 10327 19132 15612 14510 15404 6990 7657 IV 11589 12805 14119 5460 5969 6821 17864 14095 12745 13639 4976 5146 17815 I 10010 10884 11856 5775 6185 6871 14785 12285 11201 12027 5347 5423

August 2009 Groups II 12651 13950 15348 9479 10527 12277 16363 14288 13629 14455 8201 9127 III 11301 12474 13745 7814 8672 10106 15328 13127 12342 13168 6787 7462 IV 9427 10353 11378 5323 5812 6629 14070 11623 10591 11417 4790 4971 14021 I 10212 11112 12112 6028 6477 7226 15135 12703 11567 12482 5609 5685

September 2009 Groups II 13084 14440 15896 10040 11173 13063 16867 14891 14211 15126 8709 9697 III 11553 12759 14065 8134 9042 10556 15712 13586 12756 13671 7103 7791 IV 9764 10734 11804 5756 6310 7236 14510 12149 11083 11998 5196 5413 14461

14046 13590 7299

11574 11368 7124

12100 11949 7566

100

Fertilizers Complex Fertilizers I 15-15-15-0 17-17-17-0 19-19-19-0 20-20-0-0 23-23-0-0 28-28-0-0 10-26-26-0 12-32-16-0 14-28-14-0 14-35-14-0 16-20-0-13 20-20-0-13 10-26-26-0 (CFL Vizag & HIL, Dahej) 12-32-16-0 (HIL Dahej) 14-35-14-0 (CFL Vizag) 20-20-0-13 (IFFCO, Paradeep) 10058 10939 11918 6126 6589 7362 14870 12617 11492 12442 5729 5805

October 2009 Groups II 12614 13909 15302 9717 10801 12610 16391 14552 13841 14791 8492 9396 III 11300 12474 13745 8100 9002 10507 15380 13420 12588 13538 7117 7779 IV 9856 10841 11923 6183 6801 7832 14410 12260 11239 12189 5579 5862 14361 I 9915 10777 11736 5957 6394 7125 14620 12328 11239 12129 5579 5655

November 2009 Groups II 12770 14085 15498 9946 11064 12929 16340 14502 13867 14757 8660 9644 III 11299 12472 13743 8120 9024 10534 15225 13244 12467 13357 7119 7818 IV 10004 11008 12110 6402 7052 8138 14354 12204 11257 12147 5739 6100 14305 I 9642 10467 11390 5545 5922 6550 14147 11709 10697 11443 5209 5285

December 2009 Groups II 12822 14144 15565 9968 11091 12962 16084 14143 13629 14375 8638 9708 III 11098 12245 13489 7804 8663 10094 14800 12683 11993 12739 6826 7544 IV 9883 10870 11955 6192 6812 7846 13982 11706 10857 11603 5531 5932 13933

12211 12140 8015

12155 12098 8253

11657 11554 8085

Fertilizers Complex Fertilizers I 15-15-15-0 17-17-17-0 19-19-19-0 20-20-0-0 23-23-0-0 28-28-0-0 10-26-26-0 12-32-16-0 14-28-14-0 14-35-14-0 16-20-0-13 20-20-0-13 10-26-26-0 (CFL Vizag & HIL, Dahej) 12-32-16-0 (HIL Dahej) 14-35-14-0 (CFL Vizag) 20-20-0-13 (IFFCO, Paradeep) II 9402 10196 11087 5345 5691 6269 13733 11293 10333 11009 5112 5188

January 2010 Groups III 12631 13929 15324 9833 10935 12772 15703 13766 13310 13986 8593 9676 IV 10787 11893 13095 7509 8323 9680 14339 12210 11562 12238 6653 7352 I 9554 10498 11540 5873 6445 7399 13509 11219 10410 11086 5339 5716 13460 II 10573 11522 12571 6814 7381 8326 15762 13718 12454 13644 6924 7000

February 2010 Groups III 13647 15079 16611 11076 12387 14540 17628 16068 15287 16477 10240 11282 IV 12000 13266 14632 9034 10077 11815 16396 14669 13722 14912 8509 9220 I 10781 11889 13096 7418 8222 9562 15575 13689 12583 13773 7211 7604 15526 II 11686 12784 13980 8396 9199 10540 17691 16170 14600 16344 8857 8933

March 2010 Groups III 14838 16430 18119 12782 14325 16900 19610 18582 17506 19250 12256 13319 IV 13198 14625 16149 10730 12026 14188 18381 17189 15948 17692 10533 11267 12220 13519 14917 9433 10538 12383 17721 16402 15033 16777 9491 9970 17672

11170 11037 7869

13640 13724 9757

16353 16728 12123

101

ANNEXURE-XI STATEMENT SHOWING THE MRP OF P&K FERTILIZERS, NUTRIENT BASED SUBSIDY AND PERCENTAGE PAYMENT BY FARMERS DURING 2010-11
(Rs. Per MT) Sl.No. Products MRP from 1.4.2002 to 17.6.2008 MRP w.e.f. 18th June 2008 to 31st March 2010 4 9350 9350 4455 7460 4600 5875 6295 5343 6145 7481 7197 7637 7050 8185 5121 5804 6487 10350 MRP w.e.f. 1.4.2010 under NBS (as intimated by Company) 5 9950 9950 5055 8050 3200 6475 6895 5943 6745 8281 7897 8337 7650 8785 5721 6404 7287 8500 Subsidy under NBS Total Cost under NBS % payment by farmers

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Notes: 1 2 3 4 5 6 7

2 DAP MAP MOP TSP SSP (w.e.f. 1..5.2008) 16-20-00-13 20-20-0-13 20-20-00-00 23-23-00-00 28-28-00-00 10-26-26-00 12-32-16-00 14-28-14-00 14-35-14-00 15-15-15-00 17-17-17-00 19-19-19-00 16-16-16-00 Ammonium Sulphate

3 9350 9350 4455 7460 3400 7100 7280 7280 8000 9080 8360 8480 8300 8660 6980 8100 8300

6 16268 16219 14692 12087 4400 9203 10133 9901 11386 13861 15521 15114 14037 15877 11099 12578 14058 11838 5195

7= 5+6 26218 26169 19747 20137 7600 15678 17028 15844 18131 22142 23418 23451 21687 24662 16820 18982 21345 13695

8=5/7X100 37.95 38.02 25.60 39.98 42.11 41.30 40.49 37.51 37.20 37.40 33.72 35.55 35.27 35.62 34.01 33.74 34.14 62.07

MAP was inducted into the Concession Scheme w.e.f. 1.4.2007 TSP was inducted into Concession Scheme w.e.f. 1.4.2008 Ammonium Sulphate (Capro Lactum Grade) was inducted into the Concession Scheme w.e.f. 1.7.2008 for FACT and GSFC Nutrient Based Subsidy Policy was announced on 4.3.2010 w.e.f. 1.4.2010 and the MRP was Rs. 30/bag higher than the MRP prevailing as on 31.3.2010.NBS for SSP was introduced on 21.4.2010 w.e.f. 1.5.2010 16-16-16-00 was inducted into the NBS on 6.8.2010 w.e.f. 1.7.2010 Separate additional subsidy would be paid to FACT/NFL/GNVFC for using Naphtha/FO/LSHS for producing captive Ammonia for a period of two years. (announced on 6.8.2010) - rate to be finalized The above said Nutrient Based Subsidy is based on the per Kg Nutrient Based Subsidy for nutrient N, P, K & S for 2010-11 w.e.f. 1.4.2010 is as follows : Nutrients N P K S NBS per Kg of Nutrient (in Rs.) 23.227 26.276 24.487 1.784

102

ANNEXURE-XII DETAILS OF EXPENDITURE ON SUBSIDY/ CONCESSION DURING THE YEAR 2001-02 to BUDGET ESTIMATES 2010-11
(Rs In Crores) Period Amount of Concession disbursed on Decontrolled Fertilizers (Indigeneous + Imported) Indigenous P&K Imported P&K Total Indigenous Urea Amount of subsidy disbursed on urea Imported Urea Total of Urea (Gross) 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 (Cash) (Bonds) 2008-09 (Cash) (Bonds) 2009-10 Budget Estimates 2010-11 3759.52 2487.94 2606.00 3977.00 4499.20 6648.17 7833.80 }10333.80 2500.00 24707.10 }32957.10 8250.00 16000.00 13000.00 8750.00 23452.06 15500.00 1500.00 23847.69 }32597.69 17000.00 39452.06 28500.00 744.00 736.58 720.00 1165.18 2096.99 3649.95 5100.00 }6600.00 4000.00 48554.79 }65554.79 3000.00 17580.25 15980.73 4503.52 3224.52 3326.00 5142.18 6596.19 10298.12 12933.80 }16933.80 3500.00 17968.74 }20968.74 6999.98 8360.00 8044.00 7790.00 8521.00 10243.15 10652.57 12650.37 12950.37 }16450.37 12971.18 }12971.18 3000.00 24580.23 24340.73 147.50 1.16 0.82 742.37 2140.88 5071.06 9934.99 }9934.99 3500.00 30939.92 }33939.92 20000.00 64032.29 52840.73 8191.50 7791.16 8521.82 10985.52 12793.45 17721.43 22885.36 }26385.36 7500.00 79494.71 }99494.71 (Gross) 12695.02 11015.68 11847.82 16127.70 19389.64 28019.55 35819.16 }43319.16 Total for all fertilizers

103

ANNEXURE-XIII LIST OF THE SPECIFIED ROCK PHOSPHATE NOTIFICATIONS UNDER GUIDELINES DATED 5.8.2002 ON CONCESSION SCHEME OF DECONTROLLED P & K FERTILIZERS FOR SSP MANUFACTURERS (UPDATED ON 24.8.2009)
Notification No.M-19011/33/2001-MPR dated 19th September, 2001 S. No. A Primary Grade of rock phosphate Mined rock chips with 31.5% and above P2O5 content by wt. On an average Jordan Rock with 30.0% and above P2O5 content by wt. On an average Beneficiated rock phosphate (BRP with 33.55% and above P2O5 content by wt. On an average. Syrian rock with 29.36% and above P2O5 content by wt. On an average. Beneficiated rock phosphate (BRP with 33.55% and above P2O5 content by wt. On an average. Jordan rock with 31.6% and above P2O5 content by wt. On an average. Specification of blending rock Source of origin Rajasthan State Mines & Minerals Limited (RSMML)

Rock imported from Jordan. RSMML

Rock imported from Syria

Jhabua A or B grade rock with 23% P2O5 content by wt. To get a mixture having 31.6% and above P2O5 content by wt. On an average.

BRP from RSMML and blending rock from Madhya Pradesh State Mining Corpn. Ltd. (MPSMC) Rock imported from Jordan and blending rock from MPSMC.

Jhabua rock with 25% P2O5 content by wt to get a mixture having 30% and above P2O5 content by wt. On an average.

Notification No.M-19011/33/2001-MPR dated 8th October, 2001 G Egyptian rock with 32% and above P2O5 content by wt. On an average. Beneficiated rock phosphate (BRP) with 33.55% and above P2O5 content by wt. On an average. Rock imported from Egypt.

Lower grade rocks with 25% P2O5 content by wt. From mines of Madhya Pradesh State Mining Coproration Ltd., RSMML, Rajasthan State Mineral Development Corpn. (RSMDC) or 27-31% P2O5 content by wt. Of Matton mines to get a mixture having 31.4% and above P2O5 content by wt. On an average.

BRP from RSMML. Blending rock from MPSMC, RSMDC, RSMML and Hindustan Zinc. Ltd. (HZL).

Notification No. M-19011/33/2001-MPR dated 31st January, 2002 I Beneficiated rock phosphate (BRP) with 33.55% and above P2O5 content by wt. On an average. (i) Lower grade rocks with +22% but less than 25% P2O5 content by wt. Of RSMDC to get a mixture having 31.7% and above P2O5 content by wt. On an average. BRP from RSMML. Blending rock from RSMDC and RSMML.

104

S. No.

Primary Grade of rock phosphate

Specification of blending rock (ii) Rocks with 25% and above to 27% P2O5 content by wt. From mines of RSMDC to get a mixture having 31.4% and above P2O5 content by wt on an average. (iii) Rocks with +30% P2O5 content by wt. From mines of RSMDC to get a mixture having 31.5% P2O5 content by wt. On an average. (iv) Rock with 23% P2O5 content by wt. From mines of RSMML to get a mixture having 31.4% P2O5 content by wt. On an average.

Source of origin

Jordan rock with 32% and above P2O5 content by wt. On an average.

Lower grade rock with 25% P2O5 content by wt. From mines of RSMML to get a mixture having 30.66% P2O5 content by wt. On an average.

Rock imported from Jordan and blending rock from RSMML.

Notification No. 19011/33/2001-MPR dated 13th May, 2002 K Israeli Rock phosphate with 32% P2O5 content and above by wt. On an average. Not applicable Rock phosphate imported from Israel.

Notification No. M-19011/33/2001-MPR (Vol.II) dated 23rd April 2003 L Beneficiated rock phosphate with 33.5% P2O5 content by wt on an average. Lower grade rock with P2O5 content 29% by wt and above with 2.78% average iron oxide content of MPSMC to get a mixture of 31.4% on an average. BRP from RSMML. Blending rock from Hirapur Mines of MPSMC.

Notification NO.19011/33/2001-MPR dated 14.12.2005 Beneficiated Rock Phosphate with 30.2% P2O5 produced by M/s. Krishana Phoschem Ltd., 115-118, AKVN Industrial Area, P.O. Meghnagar, Jhabua, Madhya Pradesh 19011/33/2001-MPR dated 19.9.2006 (Notified on 19.9.2006)

Beneficiated rock phosphate (BRP with 33.55% and above P2O5 content by wt. On an average.

RSMML-

O P Q W

19011/33/2001-MPR (Vol-II) dt. 8.5.2007 Primary grade of Rock Phosphate of Vietnam with 34% P205 content by weight on an average. 19011/33/2001-MPR (Vol-II) dt. 30.10.2007 Primary grade of Rock Phosphate of Algeria with 31.2% P205 content by weight on an average. 19011/33/2001-MPR (Vol-II) dt. 19.11.2007 Primary grade of Rock Phosphate of Egypt with 31.02% P205 content by weight on an average. Notification No. 19011/33/2001-MPR (Vol.II) dt. 15.6.2009 Beneficiated Rock Phosphate with 31% P2O5 produced by M/s. BEC fertilizers Ltd., Bilaspur Chhattisgarh

105

ANNEXURE-XIV PROFITABILITY OF THE PUBLIC SECTOR UNDERTAKINGS AND COOPERATIVES UNDER THE DEPARTMENT OF FERTILIZERS. (See Chapter-7) (Rupees in Crores) Net Profit(+)/Net loss(-) Name of Undertaking/ Cooperative Fertilizer Corporation of India Limited (FCI) Hindustan Fertilizer Corporation Limit6ed (HFC) Rashtriya Chemicals & Fertilizers Limited (RCF) National Fertilizers Limited (NFL) Project & Development India Limited (PDIL) Fertilizers and Chemicals Travancore Limited (FACT) Madras Fertilizers Limited (MFL) Brahamputra Valley Fertilizer Corporation Ltd. (BVFCL) FCI Aravali Gypsum & Minerals India Limited (FAGMIL) Cooperative Sector Krishak Bharti Cooperative Limited (KRIBHCO) 193.24 209.2 250.13 228.17 124.63 2006-07 (-)1422.63 (-)1065.14 148.74 176.10 11.20 (-)124.72 (-)114.78 (-)62.37 11.51 2007-08 (-)1504.83 (-)1101.98 158.15 109.0 12.26* 8.97 (-)134.85 (-)105.83 7.54 2008-09 (-)752.60 **4841.16 211.58 97 14.82 42.95 (-)145.38 (-)215.04 9.04 2009-10 (-)585.86 (-)382.47 234.87 171.51 14.48 (-)103.83 6.88 (-)133.23 8.67 2010-11 (upto Dec.10) (-)447.57 (-)286.83 149.02 111.78 12.90 (-)14.09* 66.66 (-)96.44 3.89

*Pre tax profit. **book Profit is due to write back of interest on Govt. of India loan.

106

ANNEXURE-XV EMPLOYMENT OF SC/ST, EX-SERVICEMEN,PHYSICALLY HANDICAPPED & OTHER BACKWARD CLASSES (OBCs) PERSONS IN PUBLIC SECTOR UNDERTAKING/CO-OPERATIVE Name of PSU Group Total No. of Employees SC 1. KRIBHCO A B C D TOTAL 2. NFL A B C D TOTAL 3. MFL A B C D TOTAL 4. 5. FAGMIL PDIL TOTAL A B C D On contract TOTAL 6. 7. RCF FACT TOTAL A B C D D.S. TOTAL 8. BVFCL as on 01.12.2010 TOTAL 1408 236 359 45 2048 1704 1912 915 142 4673 226 229 323 778 97 424 40 33 77 574 4235 468 358 748 711 34 3819 1111 36 13 41 2 92 367 500 232 112 1211 24 50 103 177 13 48 5 10 11 74 591 79 193 72 101 9 454 82 No. of Employees belonging to ST 12 13 22 47 83 156 43 3 285 3 4 1 8 6 21 1 22 258 10 55 23 21 109 167 Ex.Ser 5 9 14 5 35 39 2 81 12 12 1 8 12 24 5 41 2 P.Hs 2 1 5 8 11 21 19 3 54 2 3 5 Nil 35 4 21 14 33 1 73 3 OBC 137 47 58 21 263 83 116 116 7 322 11 26 69 106 7 62 2 6 22 92 323 70 334 309 288 17 1018 344

107

ANNEXURE-XVI SUMMARY OF AUDIT OBSERVATION PERTAININBG TO DEPARTMENT OF FERTILIZERS Audit Report No. CA 9 of 2009-10 National Fertilizers Limited The company paid incentives of Rs. 4.11 crore to workmen in contravention to the Wage agreement with unions and Government of India directions. (Para 8.1.1) National Fertilizers Limited made irregular payment of ex-gratia amounting to Rs. 2.03 crore to its employees in contravention of DPE guidelines. (Para 8.1.2) PARAS PERTAINING TO PAC REPORTS Details of ATNs pending with different Ministries/Departments and their disposal status Name of the Ministry/Department Ministry of Chemicals & Fertilizers, Department of Fertilizers Sl. No. & Year of No. the Report No. of paras/PAC reports on which ATNs have been submitted to PAC after vetting by Audit Details of the Paras/PAC Reports on which ATN are pending

No. of ATNs not sent by the Ministry even for the first time

No. of ATNs send but returned with observations and Audit is awaiting their resubmission by the Ministry Nil

No. of ATNs which have been finally vetted by Audit but have not been submitted by Ministry of PAC Nil

1.

54th Report of PAC Report for 2005-06

Six Paras 52, 53, 54, 58, 59 & 60

Nil

108

GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF FERTILIZERS