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No significant investment was made in the fertiliser sector during 2010-14 period even after the launch of Nutrient Based Subsidy scheme to promote the domestic industry, says a report by government auditor CAG.
"Audit observed that no significant investment was made in the fertiliser sector to increase either the number of fertiliser plants or their installed capacity even after introduction of NBS Policy," CAG said in its performance audit on 'Nutrient Based Subsidy Policy for Decontrolled Phosphatic & Potassic Fertilisers'.
Promoting growth of indigenous fertiliser industry was one of objectives of NBS policy, there was neither any addition in the number of fertiliser plants nor was there any increase in the installed capacity of these fertiliser plants during 2010-11 to 2013-14, said the report, which was tabled in Parliament last week.
The Nutrient Based Subsidy (NBS) regime was introduced in April 2010.
Though the number of plants remained the same even in 2013-14, installed capacity increased marginally by 1.03 million tonne and 849,000 for DAP and complex fertiliser, respectively, during that year, it said.
During 2009-10 to 2013-14, the number of Di-Ammonium Phosphate (DAP) plants were static at 13, while that of complex fertilisers remained at 21.
The installed capacities during the period ranged between 72.99-83.32 LT and 52.22-60.71 LT respectively.
Production of DAP, which was 58.18 per cent of the installed capacity in 2009-10 (in Concession Scheme), went down to 43.33 per cent of the installed capacity in 2013-14.
As far as actual production was concerned, it fell by 14 per cent during the period 2009-10 to 2013-14, it added.
Also, production of complex fertiliser declined by 14 per cent during 2009-10 to 2013-14, as it fell from 80.38 LT in 2009-10 to 69.13 LT during 2013-14.
The report also observed that production of Potassium & Phosphate (P&K) fertilisers by indigenous fertiliser industry declined.
CAG said there was no incentive for the companies to import raw material or intermediaries and produce finished goods, fertiliser companies preferred to import the finished product.
In its recommendation, the Comptroller and Auditor General (CAG) said DoF should take measures to encourage and enhance investment in the fertiliser sector in close coordination with Ministry of Finance.
"Early adoption of a result oriented approach to promote growth of domestic production of P&K fertilisers is recommended," it added.
