STANDING COMMITTEE ON CHEMICALS & FERTILIZERS 30 (2012-13) FIFTEENTH LOK SABHA MINISTRY OF CHEMICALS AND FERTILIZERS (DEPARTMENT OF FERTILIZERS) DEMANDS FOR GRANTS (2012-2013) [Action Taken by the Government on the Observations/Recommendations contained in the Twenty Fifth Report of the Standing Committee on Chemicals and Fertilizers (Fifteenth Lok Sabha) on Demands for Grants (2012-13) of the Ministry of Chemicals and Fertilizers (Department of Fertilizers)] REPORT LOK SABHA SECRETARIAT NEW DELHI December, 2012/Agrahayana, 1934 (Saka) 2 CC&F No. -30 REPORT STANDING COMMITTEE ON CHEMICALS AND FERTILIZERS (2012-13) FIFTEENTH LOK SABHA MINISTRY OF CHEMICALS AND FERTILIZERS (DEPARTMENT OF FERTILIZERS) DEMANDS FOR GRANTS (2012-2013) [Action Taken by the Government on the Observations/Recommendations contained in the Twenty Fifth Report of the Standing Committee on Chemicals and Fertilizers (Fifteenth Lok Sabha) on Demands for Grants (2012-13) of the Ministry of Chemicals and Fertilizers (Department of Fertilizers)] Presented to Lok Sabha on 17.12.2012 Laid in Rajya Sabha on 17.12.2012 LOK SABHA SECRETARIAT NEW DELHI December, 2012/Agrahayana, 1934 (Saka) C:\Documents And Settings\Administrator\Desktop\Report No.29, 30, 31, 32\Report No.30 (Fertilizers).Doc 3 CONTENTS Page No. COMPOSITION OF THE COMMITTEE (2012-13) ………………………………... Introduction. …………………………………………………..………………………… Chapter I Report ……………….………………………………………………….. Chapter II Observations / Recommendations which have been accepted by the Government Chapter III Observations / Recommendations which the Committee do not desire to pursue in view of the Government’s replies Chapter IV Observations / Recommendations in respect of which reply of the Government have not been accepted by the Committee and which require reiteration Chapter V Observations / Recommendations in respect of which replies of the Government are of interim nature ANNEXURE A Availability of Fertilizers during Kharif 12 (upto July 2012) along with stock pre-position. APPENDICES I. Extracts Minutes of Fourth Sitting of the Standing Committee on Chemicals & Fertilizers (2012-13) held on 10 December 2012 II. Analysis of Action Taken by the Government on the recommendations contained in the Twenty-Fifth Report (15th Lok Sabha) of the Standing Committee on Chemicals & Fertilizers (2010-11) on ‘Demands for Grants (2012-2013)’ of the Ministry of Chemicals and Fertilizers (Department of Fertilizers). C:\Documents And Settings\Administrator\Desktop\Report No.29, 30, 31, 32\Report No.30 (Fertilizers).Doc 4 COMPOSITION OF THE STANDING COMMITTEE ON CHEMICALS & FERTILIZERS (2012-13) Shri Gopinath Munde - Chairman MEMBERS LOK SABHA 2. Shri S. Alagiri 3. Shri Gajanan D. Babar 4. Shri P.P. Chauhan 5. Shri K.D. Deshmukh 6. Shri Sher Singh Ghubaya 7. Shri Radadiya Vitthalbhai Hansrajbhai 8. Shri Sk. Nurul Islam 9. Shri Sakti Mohan Malik 10. Shri Paswan Kamlesh 11. Shri Amarnath Pradhan 12. Shri Ashok Kumar Rawat 13. Shri Tufani Saroj 14. Shri Suresh Kumar Shetkar 15. Shri Raju Shetti 16. Shri G.M. Siddeshwara 17. Shri D. Venugopal 18. Vacant 19. Vacant 20. Vacant 21. Vacant RAJYA SABHA 22. Shri Biswajit Daimary 23. Shrimati Naznin Faruque 24. Shri A.A. Jinnah 25. Shri Brijlal Khabri 26. Dr. Vijay Mallya 27. Shri Pyarimohan Mohapatra 28. Shri Dilipbhai Pandya 29. Shri Raghunandan Sharma 30. Vacant 31. Vacant SECRETARIAT 1. Smt Rashmi Jain - Joint Secretary 2. Shri Anil Kumar Srivastava - Additional Director 3. Smt. Emma C. Barwa - Under Secretary -------------------------------------------------------------------------------------------------------------------- Shri P. Balaram Naik appointed as a minister of state C:\Documents And Settings\Administrator\Desktop\Report No.29, 30, 31, 32\Report No.30 (Fertilizers).Doc 5 INTRODUCTION I, the Chairman, Standing Committee on Chemicals and Fertilizers (2012-13) having been authorised by the Committee to present the Report on their behalf, present this Thirtieth Report (Fifteenth Lok Sabha) on Action Taken by the Government on the observations / recommendations contained in the Twenty-Fifth Report (Fifteenth Lok Sabha) of the Standing Committee on Chemicals and Fertilizers (2011-12) on ‘Demands for Grants (2012-13)’ of the Ministry of Chemicals and Fertilizers (Department of Fertilizers). 2. The Twenty-Fifth Report (Fifteenth Lok Sabha) of the Standing Committee on Chemicals and Fertilizers was presented to Lok Sabha on 2 May, 2012. The Action Taken replies of Government to all observations / recommendations contained in the Report were received on 28 August, 2012. The Standing Committee on Chemicals and Fertilizers (2012-13) considered and adopted this Report at their sitting held on 10 December, 2012. 3. An analysis of the Action Taken by the Government on the observations / recommendations contained in the Thirtieth Report (Fifteenth Lok Sabha) of the Committee is given in Appendix-II. 4. For facility of reference and convenience, the observations / recommendations of the Committee have been printed in bold letters in the body of the Report. NEW DELHI; GOPINATH MUNDE, 17 DECEMBER, 2012 Chairman, 26 Agrahayna, 1934 (SAKA) Standing Committee on Chemicals and Fertilizers C:\Documents And Settings\Administrator\Desktop\Report No.29, 30, 31, 32\Report No.30 (Fertilizers).Doc 6 REPORT CHAPTER – I This Report of the Standing Committee on Chemicals and Fertilizers deals with the action taken by the Government on the Observations / Recommendations contained in the Twenty Fifth Report (Fifteenth Lok Sabha) of the Committee on Demands for Grants (2012-13) of the Ministry of Chemicals & Fertilizers (Department of Fertilizers) which was presented to Lok Sabha on 02 May, 2012. The Report contained 11 Observations / Recommendations. 2. The Ministry of Chemicals & Fertilizers (Department of Fertilizers) were requested to furnish replies to the Observations / Recommendations contained in the Twenty Fifth Report within three months from the date of presentation of the Report, i.e. by 2nd August, 2012. The Action Taken Replies of the Government in respect of all the 11 Observations / Recommendations contained in the Report have been received from the Ministry of Chemicals and Fertilizers, Department of Fertilizers vide their O.M. No.5(1)/2011-Fin-II dated 28th August, 2012. The categorization of the Action Taken Replies of the Government is as follows:- (i) Observations / Recommendations which have been accepted by the Government Sl.Nos. 1, 2, 3,4,5,6,8, 9 and 11 (Total =09) Chapter-II (ii) Observations / Recommendations which the Committee do not desire to pursue in view of the Government’s replies Sl.No. NIL. (Total =NIL) Chapter-III (iii) Observations / Recommendations in respect of which reply of the Government have not been accepted by the Committee and which require reiteration Sl.No. NIL (Total =NIL) Chapter-IV (iv) Observations / Recommendations in respect of which replies of the Government are of interim nature Sl.Nos. 7 and 10 (Total = 02) Chapter-V C:\Documents And Settings\Administrator\Desktop\Report No.29, 30, 31, 32\Report No.30 (Fertilizers).Doc 7 3. The Committee desire that the Action Taken Notes on the Observations / Recommendations contained in Chapter-I of this Report and the final reply in respect of the Observation/Recommendation for which only interim reply has been furnished by the Ministry should be furnished expeditiously. 4. The Committee will now deal with action taken by the Government on some of their Observations/Recommendations which still require reiteration or merit comments. A. DEMANDS FOR GRANTS Recommendation Sl. No./Para No. 3 Stressing the need to keep non-plan expenditure under control, the Committee had recommended as under:- "The Committee observe from the figures provided by the Department that the non-plan expenditure has increased considerably from the years 2009-10 to 2011-12. The allocation under the figures for the financial years 2009-10, 2010-11 and 2011-112 are Rs.56,600.50, Rs.57860.00 and Rs.71592.00 crore (RE) respectively. The department was unable to provide any satisfactory response to a specific query as to how to keep the Non-Plan expenditure under control. While the Committee agree that farmers need to be protected from price volatility in the international market and other negative factors, the need to rein in the ever increasing expenditure under the Non-Plan allocation cannot be over-emphasized. The Committee, therefore, recommend that the Department should take steps on a priority basis to address this issue and intimate the measures taken in this regard by them. The Committee, further, desire that Department of Fertilizers should also keep strict watch and control over factors impacting budgetary allocations and expenditure thereon." REPLY OF THE GOVERNMENT In reply of the aforesaid para, the Department of Fertilizers has stated as under :- "In order to contain the expenditure under the non-plan allocation i.e. subsidy bills, the Government is implementing NBS policy w.e.f. 1.4.2010. Under the policy, a fixed subsidy on each nutrient of P & K fertilizers is announced each year. Normally, the subsidy rate remains fixed for the whole financial year. Hence, expenditure under non-plan for P&K fertilizers will not exceed the budgeted figures if the consumption remains at the expected level. Department of Fertilizers has announced NBS rates for the year 2012-13 in such a manner that total subsidy outgo for the P & K Fertilizers for the financial year 2012-13 would be reduced by more than 20% over the previous year. However, the total subsidy