The Centre has formed eight teams for 17 States to curb the diversion of fertilisers such as urea for industrial use and prevent their black marketing and smuggling.
Urea is highly subsidised for agricultural use and is currently cheaper than rock salt. Cheap availability could have possibly led to black marketing, hoarding and smuggling of urea, which also has various industrial and commercial applications such as producing some types of plastics, glues, animal feed and pesticides. There are reports of it being used to produce milk, too.
The teams, consisting of senior officials from the Fertiliser Ministry, will review the situation on availability of fertilisers and their use with the State governments periodically. The teams will also look into black marketing, hoarding and smuggling of fertilisers, besides diversion of urea for non-agricultural applications.
“This is not a one-time affair and the review will be done on a regular basis,” official sources said. There has been allegation of payment of subsidy to the companies without proper formalities, such as receipts of supply in proper quantity and quality from the States.
The States included in the list are Tamil Nadu, Andhra Pradesh, Punjab, Haryana, Jammu and Kashmir, Bihar, Madhya Pradesh, Maharashtra, Rajasthan, Jharkhand, Chhattisgarh, Uttar Pradesh, Gujarat, Karnataka, Kerala, West Bengal and Odisha.
It is reported that urea is smuggled from States such as Uttar Pradesh and Bihar to Nepal and Bangladesh. Unlike in India, urea is not subsidised in these countries, thereby creating vast arbitrage opportunities. There are no official estimates on the quantity smuggled or diverted for industrial applications.
The demand for urea is estimated at 30 million tonnes, growing at 3 per cent annually. The domestic production capacity is around 22 million tonnes.
The shortfall of 8 mt is being met through imports, which are likely to increase to 10 mt by 2016-17.
The Fertiliser Ministry teams will also look into the issues relating to quality, the sale of non-standard fertilisers, verify quantity at godowns of dealers and companies and leakages in quantity due to handling.