Parliament panel slams fertiliser sector’s 'Non-Strategic' tag, calls it misaligned with Atmanirbhar Bharat goals

NEW DELHI: A parliamentary panel on fertiliser, in its report on disinvestment of fertiliser PSUs, has found the finance ministry's decision to classify the sector as “non-strategic” as “incongruent” with the government’s agenda to be self-reliance (Atma Nirbhar).

The panel headed by Congress MP Kirti Azad in its report submitted to Parliament this week has mentioned that despite multiple submissions by the fertiliser department to the finance ministry to classify the sector as strategic considering its critical role in ensuring food security, sustaining rural livelihoods, and advancing national self-reliance, the latter did not accept this.

The report mentioned that disinvestment department (DIPAM) turned down these requests, arguing that Central Public Sector Enterprises (CPSEs) contribute only 25% and 11% of the country’s urea and non-urea fertiliser production respectively; that many operate at a loss; and that their continued existence is inconsistent with fiscal prudence and the criteria for strategic classification, as approved by the Cabinet Committee on Economic Affairs (CCEA) under the New PSE Policy.

“The committee finds this reasoning incongruent with the govt’s Atmanirbhar Bharat agenda. Contrary to DIPAM’s claim, several fertiliser PSUs have shown remarkable turnaround, notably FACT, which has transitioned from a loss-making entity to a consistently profitable enterprise,” the report said. It also highlighted that the revival of closed units at Gorakhpur, Sindri, Barauni and Ramagundam through CPSE-led joint ventures, has added over 76.2 lakh tonnes to India’s annual urea production capacity.

The panel said that this clearly demonstrates the strategic value of leveraging PSU assets to meet national goals. “In light of rising global fertiliser prices and India’s continued reliance on imports for over 90% of its potash and phosphate needs (procured under the Open General License), the sustained operation and strengthening of fertilizer PSUs is crucial not only for domestic production but also for price stabilisation, disaster resilience, and long term food sovereignty,” it said.

Under the framework of the new public sector enterprise policy for Atmanirbhar Bharat in 2021, fertiliser sector was categorised as a non-strategic sector, making it eligible for privatisation or closure. But there has been no progress so far as disinvestments of seven PSUs manufacturing fertilisers is concerned.

As per fertiliser department, in FY25, out of the total 38.8 million tonne (MT) of urea consumption, 5.6 MT was met through imports. In case of non-urea fertilisers such as diammonium phosphate (DAP), NPK (nitrogen, phosphorus, and potassium) and muriate of potash (MOP DAP), imports were 10.4 MT against the consumption of 21.1 MT.

According to the committee, the country's dependency on import at present is to the extent of 25% of the requirement of urea, 90% in case of phosphates - as raw material or finished fertilizers and 100% in case of potash.

It has recommended that there is a strong need to ensure that the existing fertiliser manufacturing units function profitably. It has also stressed on the need to revive the closed units so as to bridge the gap between the demand and availability of fertilisers in the country.