How government adopted multi-pronged strategy to stop diversion of subsidised urea?

New Delhi, Jun 8: In the last one-and-half months, the government has seized around 35,000 bags (45 kg each) of the fertiliser while arresting six people, sources informed news agency PTI.

The fertiliser department has initiated a major crackdown to stop the diversion of highly-subsidised urea to industries by adopting a multi-pronged strategy to stop the diversion and black marketing of agriculture-grade urea following various complaints. The diversions are happening despite the urea being coated with neem.

How Govt Stopping Diversion of Subsidised Urea?

The department has constituted a special team 'Fertiliser Flying Squad' for conducting surprise inspection of fertiliser and related units to check diversion, black marketing and supply of sub-standard quality of fertilisers. During the search operations at major suppliers of industrial-grade urea, GST evasion of Rs 63.4 crore has been detected, out of which Rs 5.14 crore has been recovered.

An unaccounted stock of 25,000 bags of agriculture-grade urea was found and seized, the sources said, adding that six persons were arrested under the Central GST Act and remanded to judicial custody. A follow-up investigation is under process.

That apart, the department searched 52 industrial units across six states -- Haryana, Kerala, Rajasthan, Telangana, Gujarat and Uttar Pradesh -- for alleged diversion of urea. Many of these units procured agriculture-grade urea and packed them in industrial-grade urea bags illegally, the sources said.

"Unauthorised urea stock of 7,400 bags was seized at different units. In total, seven FIRs/complaints have been registered against units involved in illegal activities," a source said.

The department has also raided 38 mixture manufacturing units across eight states, including Maharashtra, Gujarat, Tamil Nadu and Bihar. These units were allegedly involved in supply of inferior quality of mixture fertilisers to farmers.

Stringent Action

Sources further said states have been directed to cancel the manufacturing licences of 25 defrauding units and de-authorise them from purchasing subsidised fertiliser from the government portal.

Stringent action under the CGST Act, Fertiliser Control Order 1985 and Essential Commodity Act are being taken against those found involved in the diversion of agriculture-grade urea to industries.

The government's annual fertiliser subsidy bill is estimated to rise to about Rs 2.25 lakh crore this fiscal from Rs 1.62 lakh crore in the previous year. The annual domestic consumption of urea in the agriculture sector is 325-350 lakh tonnes.

Major Industries that Require Urea

Urea diversion normally happens to industries manufacturing plywood, cattle feed, crockery, dye and moulding powder, among others. These industries require around 15 lakh tonnes of urea annually.

How Much Does Govt Charge for a Bag of Urea?

Urea is a highly subsidised fertiliser and is sold at only Rs 266 per bag to farmers as against its actual cost of around Rs 3,000 per bag. PTI