Lok Sabha Question No. 3200 (UNSTARRED), answered on 2017-03-21
Subject: Liquidity Crisis of Fertilizer Companies
Ministry: CHEMICALS AND FERTILIZERS
Asked by: PARVESH SAHIB SINGH

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF FERTILIZERS

## LOK SABHA

UNSTARRED QUESTION NO.   3200 TO BE ANSWERED ON : 21.03.2017

## liquidity crisis of fertilizer companies

## 3200:  SHRI PARVESH SAHIB SINGH:

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

- (a) whether it is a fact that the State Fertilizer Companies are facing a liquidity crisis  due  to  delay  in  release  of  subsidy  to  the  companies  and  if  so,  the details thereof including the reasons for the delay in the release of subsidies to the companies;
- (b) the details of the steps taken by the Government to resolve the liquidity crisis within  the industries;
- (c) the details of the steps taken by the Ministry on its assurance in November last year to clear the fertilizer subsidy arrears at the earliest; and
- (d) the status of implementation of Direct Benefit Transfers in fertilizer subsidy?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF CHEMICALS & FERTILIZERS AND SHIPPING, ROAD TRANSPORT & HIGHWAYS

## ( SHRI  MANSUKH L. MANDAVIYA )-

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(a)  to  (c):  Subsidy  is  being  paid  to  fertilizer  manufacturing  units  on  regular  basis subject  to  availability  of  funds  as  per  annual  budget  allocation  by  Ministry  of Finance.  Due to shortage in allocation of funds, monthly subsidy bills of a particular year converts into pendency which is cleared from allocation provided by Ministry of Finance through supplementary or from the annual budget of subsequent year(s), on priority basis.

As and when authorised, the Department of Fertilizers also makes Special banking Arrangements (SBA) for payment of subsidy claims of fertilizer companies in  case  of  shortage  of  funds.    During  the  year  2016-17,  the  Department  of Expenditure has allowed the Department of Fertilizers to avail Rs. 10,000 crores as short  term  loan  from  the  PSU  Banks  under  SBA  for  payment  of  pending  subsidy claims.

(d): At  present,  Direct  Benefit  Transfer  (DBT)  system  for  fertilizer  subsidy payments in 16 districts is under implementation on pilot basis. Three more districts viz.,  Dhanbad  in  Jharkhand,  Begusarai  in  Bihar  and  Gorakhpur  in  Uttar  Pradesh have  been  included  in  the  pilot  project. The  list  of  19  pilot  districts  is  placed  at Annexure-I .

Under the proposed fertilizer DBT system, 100% subsidy on various fertilizer grades shall be released to the fertilizer companies instead of the beneficiaries, on the  basis  of  actual  sales  made  by  the  retailers  to  the  beneficiaries.  Sale  of  all subsidised  fertilizers  to  farmers/buyers  will  be  made  through  Point  of  Sale  (PoS) devices installed at each retailer shop and the beneficiaries will be identified through Aadhaar Card, KCC, Voter Identity Card etc.  Implementation of the DBT includes three basic steps which are as under:

- i. Installation of POS devices at retail points.
- ii. Training of the retailers to operate the POS devices.
- iii. Sale through POS  machines  through  Aadhar  based  biometric authentication/Kisan Credit Card/Voter ID.

The present status of procurement and deployment of PoS machines and DBT implementation in pilot districts is placed at Annexure-II .

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## List of pilot districts

|   Sr. No | District                  |
|----------|---------------------------|
|        1 | Krishna (AP)              |
|        2 | West Godavari (AP)        |
|        3 | Una (HP)                  |
|        4 | Hoshangabad (MP)          |
|        5 | Pali (Rajasthan)          |
|        6 | Rangareddy (Telangana)    |
|        7 | Kishanganj (Bihar)        |
|        8 | Karnal (HR)               |
|        9 | Kurukshetra (HR)          |
|       10 | Nasik (Maharashtra)       |
|       11 | Raigarh (Maharashtra)     |
|       12 | Tumkur (Karnataka)        |
|       13 | Narmada, (Gujarat)        |
|       14 | Thrissur, (Kerala)        |
|       15 | Malda, (WB)               |
|       16 | South 24 Parganas,WB)     |
|       17 | Begusaria (Bihar)         |
|       18 | Dhanbad, Jharkhand        |
|       19 | Gorakhpur (Uttar Pradesh) |

## Annexure-I

Annexure-II Status of DBT implementation in pilot districts

| Sr. No   | District               | Retailers / PoS Required                                          | PoS Received / Deployed                                                                                   | Master Training                                                                                           | DBT Status                                                                                                |
|----------|------------------------|-------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|
| 1        | Krishna (AP)           | 973                                                               | 973/973                                                                                                   | Completed                                                                                                 | Live (1st Oct 16)                                                                                         |
| 2        | West Godavari (AP)     | 1100                                                              | 1100/1100                                                                                                 | Completed                                                                                                 | Live (1st Oct 16)                                                                                         |
| 3        | Una (HP)               | 230                                                               | 230/221                                                                                                   | Completed                                                                                                 | Live (1st Jan 17)                                                                                         |
| 4        | Hoshangabad (MP)       | 246                                                               | 217/214                                                                                                   | Completed                                                                                                 | Live (1st Jan 17)                                                                                         |
| 5        | Pali (Rajasthan)       | 343                                                               | 343/270                                                                                                   | Completed                                                                                                 | Live (1st Jan 17)                                                                                         |
| 6        | Rangareddy (Telangana) | 205                                                               | 205/184                                                                                                   | Completed                                                                                                 | Live (1st Jan 17)                                                                                         |
| 7        | Kishanganj (Bihar)     | 349                                                               | 344/308                                                                                                   | Completed                                                                                                 | Live (1st Feb 17)                                                                                         |
| 8        | Karnal (HR)            | 772                                                               | 772/590                                                                                                   | Completed                                                                                                 | Live (1st Feb 17)                                                                                         |
| 9        | Kurukshetra (HR)       | 550                                                               | 520/332                                                                                                   | Completed                                                                                                 | Live (1st Feb 17)                                                                                         |
| 10       | Nasik (Maharashtra)    | 1346                                                              | 1200/1200                                                                                                 | Completed                                                                                                 | Live (1st Feb 17)                                                                                         |
| 11       | Raigarh (Maharashtra)  | 200                                                               | 200/200                                                                                                   | Completed                                                                                                 | Live (1st Feb 17)                                                                                         |
| 12       | Tumkur (Karnataka)     | 533                                                               | 305/282                                                                                                   | Completed                                                                                                 | Live (1st Mar 17)                                                                                         |
| 13       | Narmada, (Gujarat)     | 95                                                                | 95/95                                                                                                     | Completed                                                                                                 | Live (1st Mar 17)                                                                                         |
| 14       | Thrissur, (Kerala)     | 178                                                               | 200/200                                                                                                   | Completed                                                                                                 | Live (1st Mar 17)                                                                                         |
| 15       | Malda, (WB)            | 800                                                               |                                                                                                           |                                                                                                           |                                                                                                           |
| 16       | South 24Parganas,WB)   | Not Implemented as State Government is yet to come on board. 1225 | Not Implemented as State Government is yet to come on board. 1225                                         | Not Implemented as State Government is yet to come on board. 1225                                         | Not Implemented as State Government is yet to come on board. 1225                                         |
| 17       | Begusarai, (Bihar)     | 694                                                               |                                                                                                           |                                                                                                           |                                                                                                           |
| 18       | Dhanbad, (Jharkhand)   | 26                                                                | Three additional districts were included in Pilot on ary, 2017. Sensitization process has been initiated. | Three additional districts were included in Pilot on ary, 2017. Sensitization process has been initiated. | Three additional districts were included in Pilot on ary, 2017. Sensitization process has been initiated. |
| 19       | Gorakhpur, (UP)        | 1488                                                              | rement & deployment of devices in progress.                                                               | rement & deployment of devices in progress.                                                               | rement & deployment of devices in progress.                                                               |
|          | Total                  | 11353                                                             | 6422/5928                                                                                                 |                                                                                                           |                                                                                                           |

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