There have been some
media reports today, alleging inconsistency in Government’s decision to resume
the Fertilizer Subsidy to Gujarat State Fertilizer Corporation (GSFC). The
reports contain erroneous representation of facts. The following is the
clarification in this regard.
The subsidy on Ammonium
Sulphate (AS) of GSFC was stopped by an order dated 18.03.2013 on the grounds
that the company had not passed on the benefits of subsidy to the farmers. The
recovery of subsidy already paid to GSFC on AS w.e.f. 01.04.10 was also ordered
by the same order. The order was issued as the company failed to provide the
requisite data to substantiate its claim that it has passed on the benefits of
subsidy to the farmers.
The company filed a
writ petition before the Hon’ble High Court of Delhi against the above-said
order immediately. The Hon’ble Court by its order dated 02.03.16 asked GSFC to
make a representation to the DoF for reconsideration of the matter along with
all the requisite documents/data. Hon’ble Court further ordered the Department
to dispose-off the representation within 4 weeks. Accordingly, GSFC made a
representation along with the requisite data. The Data was forwarded to the Fertilizers
Industry Coordination Committee (FICC), a subordinate office of the Department.
After the examination, FICC found that the company has not fully passed on
the benefits during 2010-11 and made undue profits. However, the company had
passed on the benefits to the farmers during 2011-12 and 2012-13.
FICC calculated the
amount of Rs. 33.78 Cr to be recovered from the company for not passing on the
benefits of subsidy to the farmers during 2010-11.
The year wise profit made by the company was calculated as under:-
|
Year
(1)
|
Cost of Production
(2)
|
Subsidy
(3)
|
MRP
(4)
|
Profit
{4-(2-3)}
(5)
|
Profit %*
(6)
|
|
2010-11
|
9507
|
5069
|
7086
|
2648
|
27.86%
|
|
2011-12
|
12707
|
6618
|
7371
|
1282
|
10.09%
|
|
2012-13
|
14557
|
6204
|
7679
|
-675
|
-4.64%
|
* Up to 12% of profit is accepted as
reasonable by the Department for all products.
A Committee of Senior
officers of DoF was constituted to examine the analysis done by FICC.
The Committee after examination accepted the analysis done by FICC and
recommended that the amount of Rs. 33.78 Crores may be recovered from the
withheld subsidy amount of the company w.e.f. 01.04.10 to 17.03.13. The committee
further recommended to induct the AS with effect from the approval of the
Competent Authority i.e 06.03.2017.
Since, the matter was
subjudice and the Hon’ble Delhi High Court had given stay on the order to the
extent it seeks recovery of past dues, the department informed the company that
the department cannot take further action till the matter is subjudice. The Company
withdrew the case to enable the Department to make recovery and take further
action.
The matter of release
of subsidy for the period 18.03.13 to 05.03.17 is still under examination and
no subsidy has been released to the company for the above period yet.
Further, the matter of Rashtriya
Chemicals & Fertilizers (RCF), as mentioned in some news reports, is not
related to the matter of AS of GSFC and the matter of RCF is under examination
in which GSFC is also a party.
In view of the above
fact, the department has released the subsidy in line with the orders of
Hon’ble High Court and in view of the benefit of the
farmers since the Caprolactum Grade Ammonium Sulphate has been manufactured
in India only by two companies i.e. Fertilizers and Chemicals Travancore (FACT)
and GSFC.
*****
VM
