Parliament Parliamentary Committee
Ramagundam Fertiliser loses ₹7,954 crore due to tech failures
The Standing Committee on Chemicals and Fertilisers examined the logistics of fertiliser movement, the issue of forced bundling of non-essential products with subsidised fertilisers, and subsidy policies to ensure affordable availability…
7,954 croreRamagundam Fertiliser and Chemical Limited incurred an estimated revenue loss of Rs 7,954 crore between 2021-22 and…
The Standing Committee on Chemicals and Fertilisers examined the logistics of fertiliser movement, the issue of forced bundling of non-essential products with subsidised fertilisers, and subsidy policies to ensure affordable availability for farmers during peak seasons.
Who it concerns: This concerns the Union Department of Fertilisers, State Governments, and farmers who purchase subsidised fertilisers.
What the committee found
- The Committee flagged that non-essential products are sold as prerequisites for subsidised fertilisers (forced bundling) without a regulatory framework, recommending amendments to the Fertilizer (Control) Order, 1985 to prohibit this practice and prescribe penalties.
- The Committee identified a lack of centre-state coordination for last-mile delivery, recommending the creation of a permanent joint command and monitoring cell involving the Departments of Fertilisers, Agriculture, and Railways to oversee buffer stocks and real-time monitoring.
- The Committee noted that fertilisers are moved between distant states despite nearer sources, leading to avoidable costs, and recommended periodic cost-distance analyses and proximity-based optimisation.
- The Committee observed that current subsidies lead to excessive urea use, causing soil and groundwater damage, and recommended a comprehensive review of the pricing and Direct Benefit Transfer (DBT) framework to make it farmer-centric and restore balanced nutrient use.
- The Committee highlighted that new generation urea plants are operating below capacity and DAP capacity utilisation has declined, recommending a review of underperformance causes and performance guarantees for future technology transfers.
Also in the document
- Ramagundam Fertiliser and Chemical Limited incurred an estimated revenue loss of Rs 7,954 crore between 2021-22 and November 2025 due to recurring technology failure.
- DAP plants' capacity utilisation declined from 87.5% in 2022-23 to 67.8% in the first ten months of 2025-26.
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The original document
Parliamentary Standing Committee reports (via PRS Legislative Research)
Committee report · Ref. alignment-of-logistics-for-efficient-fertiliser-movement-and-curbing-forced-bund
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