GOVERNMENT OF INDIA
Ministry of Chemicals & Fertilizers
DEPARTMENT OF FERTILIZERS 

RAJYA SABHA
UNSTARRED QUESTION NO. 506
ANSWERED ON MARCH 01, 2013 

QUESTION
Misappropriation of Subsidies Meant for Farmers 

506. SHRI RAJEEV CHANDRASEKHAR: 

Will the Minister of CHEMICALS & FERTILIZERS be pleased to state: 

(a)   whether it is a fact that there have been several cases of fertilizer companies misappropriating the subsidies meant for farmers; 

(b)   if so, the details thereof; 

(c)    whether these companies have also been found selling fertilizers at prices higher than mandated ; and 

(d)   if so, the steps Government is taking to ensure that fertilizer companies stop engaging in such practices? 

ANSWER
MINISTER OF STATE (INDEPENDENT CHARGE) IN THE MINISTRY OF STATISTICS AND PROGHAMME IMPLEMENTATION AND
MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND FERTILIZERS
(SHRI SRIKANT KUMAR JENA)

(a) & (b): No such cases have come to the notice of the Government.

(c) & (d): The Government is implementing Nutrient Based Subsidy (NBS) Policy for Phosphatic and Potassic (P&K) fertilizers w.e.f. 01.04.2010. Under this policy a fixed amount of subsidy, decided on annual basis, is provided on subsidized P&K fertilizers depending on its nutrient content. Under this policy, the fertilizer companies fix the Maximum Retail Prices (MRP) of P&K fertilizers. Urea is, however, provided to the farmers at MRP of Rs.5360 PMT fixed by Government.

Though the market prices of subsidized fertilizers, except Urea, are determined by the demand-supply dynamics, the fertilizer companies are required to print Retail Price (MRP) along with applicable subsidy on the bags of fertilizers, clearly. Any sale above the printed MRP is punishable under the Essential Commodities Act (ECA) 1955. The State Governments are empowered to take actions under the ECA 1955 in such cases.