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Wednesday, Sep 06, 2006

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Urea distribution to come under full Govt control again

Ambarish Mukherjee

Aims to ensure availability at the right place at the right time

New Delhi , Sept. 5

The Government has decided to reintroduce total sale and distribution controls on urea and is planning to put in place the new system by December.

The objective is to ensure availability of urea at the right place at the right time.

The move follows several complaints of non-availability of fertilisers in far-flung areas and an inquiry into the actual distribution of fertilisers during the last few crop seasons.

While distribution of urea was under control some years ago, the National Democratic Alliance had decontrolled 50 per of the distribution during its regime.

Under distribution controls, the Government decides on how much fertiliser goes into each district of the various States. Under partial control, the Government decides on the destination of 50 per cent of the production while the companies are free to decide on the rest.

Moreover, the Ministry of Fertilisers, Chemicals & Petrochemicals currently monitors only State-level availability, with district-level monitoring left to the respective State Governments.

It has been found that the State Governments have not been doing the necessary monitoring, officials said.

The controlled portion comes under the purview of the Essential Commodities Act for which the actual freight cost is factored in to the subsidy payout, while an average rate is worked out into the subsidy amount for the decontrolled part.

The officials said: "Last week it was decided that the district-level supply plans would now be prepared by the Ministry and the Government would provide actual freight till destination for the full amount. This would increase the subsidy outgo only marginally by around Rs 100 crore."

They added that the Ministry would not only decide on which supply goes where, but also intensify its monitoring mechanism and link it with the subsidy payouts. "The Ministry is trying to put in place the monitoring plan by end of November, so that it becomes operational from December 1."

A Web-based software is being developed through which people can log on and check in real-time how much of which company's product has reached which district and when.

Related Stories:
Govt may control urea distribution
Dept of Fertilisers asked to take a fresh look at urea pricing policy
Urea prices: Why import parity makes better sense

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