Govt unearths leakages of Rs 100 crore in urea usage in two months

Per year, about 1-1.2 million tonnes of urea meant for farming gets diverted towards industrial use, say officials

The Centre has unearthed leakages amounting to almost Rs 100 crore in urea during the past two months. The fertiliser, meant for agricultural purposes, had been diverted for industrial use. The amount also includes GST evasion in farm-grade urea.

Officials said despite near saturation of neem-coated urea, 1-1.2 million tonnes of the nutrient is still getting diverted from farming to non-agricultural purposes, costing the exchequer around Rs 6000 crore a year.

India imports 8-10 million tonnes of the 30-35 million tonnes of urea that it consumes each year.

Officials said the Union Department of Fertilisers has constituted a special team of dedicated officers called, ‘Fertilisers Flying Squad,’ which has been conducting surprise checks and inspection of fertiliser and related units involved in diversion, black marketing, hoarding and supply of sub-standard fertilisers to farmers.

“States have also been directed to take action against such units under various provisions of the law,” senior officials said.

Fertilisers meant for agriculture usage are diverted for non-farm purposes because of the massive price differentiation between the two segments. While a normal bag of urea weighing about 45 kilograms costs the farmer Rs 266, it is actually worth about Rs 3,000. The difference in the two prices is the subsidy provided by the Central government to keep prices affordable for farmers.

Due to this huge price gap of almost Rs 2,700 per bag), a lot of urea meant for farming gets diverted to various industries such as plywood, resin, crockery, molding powder, cattle feed, dairy, industrial mining explosives.

A sizable amount of urea is also illegally exported to neighbouring nations such as Nepal and Bangladesh, as the price per bag in those countries is much higher than in India.

“It seems neem-coating of urea has not been able to end the diversion and unscrupulous elements have managed to find a way out,” a senior official remarked.

The Department of Fertiliers has also investigated GST evasion of industrial grade users of urea amounting to around Rs 63.43 crore and has shared the information with the GST department.