(a) whether the Expenditure Reforms Commission has mentioned in its report about the
irregularities being committed while extending subsidies to fertilizers;
(b) if so, the details thereof in this regard;
(c) whether the Government have ascertained the facts of the matter.
(d) if so, the details thereof; and
(e) the steps taken by the Government to check such irregularities in future.
MINISTER OF CHEMICALS AND FERTILIZERS (SHRI SUKHDEV SINGH DHINDSA)
(a) to (e) A statement is laid on the Table of the House.
STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF LOK
SABHA STARRED QUESTION NO.123 BY SHRI NAWAL KISHORE RAI
AND DR. SUSHIL KUMAR INDORA TO BE ANSWERED ON 28.11.2000
(a) & (b): Expenditure Reforms Commission (ERC), in its report has stated that the existing
unit-wise Retention Price Scheme (RPS) has many disadvantages in that it results in
high cost fertilizers, excess payments to the industry and provides no incentives to
be cost-efficient. The Commission has also mentioned that the unit-wise RPS has
been grossly misused.
(c) & (d): The Report of the ERC is under examination within the Department of Fertilizers
and inter-Ministerial consultations will soon be held to finalise the views of the
Government on the recommendations of the ERC.
(e): Incidentally, the issues pertaining to reassessment of capacities of urea manufactur-
ing units, also referred to by the ERC in its report, have already been referred to a
Committee headed by Dr. Y.K. Alagh constituted by the Government in May 2000
for giving suitable advice and recommendations to Government thereon. The report
of this Committee is likely to be received shortly. However, pending the report of
the Alagh Committee and interim reassessment of the capacities of the urea units
has already been carried w.e.f. 1.4.2000.