Government plans to privatise all public sector fertiliser plants


Report by Kamgar Ekta Committee (KEC) correspondent


The central government considers the fertilizer sector as a “non-strategic” sector despite its importance for the food security of the country. The increase in fertilizer consumption has contributed significantly to sustainable production of food grains in the country. While fertilizer consumption in the country increased by around 23% in the last 5 years during 2016-2021, the production of fertilisers in India grew by less than 4%. The shortfall was made up by imports which grew by 45%. Instead of focusing on increasing the production to meet the growing fertilizer demand, the government is considering privatizing the public sector fertilizer companies such as Rashtriya Chemicals and Fertilizers (RCFL), National Fertilizers (NFL), Fertilizer Corporation of India (FCI), Fertilizers and Chemicals Travancore (FACT) and others.

According to the public sector policy announced in 2021, the government will privatise or close all public sector undertakings (PSUs) in the “non-strategic sector”. Hence a committee chaired by Niti Ayog appears to have chosen the fertilizer sector as the first non-strategic sector for privatisation.

The privatisation of one fertilizer PSU, Project & Development India (PDIL) has been taken up earlier itself.

The public sector fertilizer companies are being privatised despite the fact that they are profit making PSUs. Eight PSUs under the Department of Fertiliser – FCI Aravali Gypsum and Minerals India, FACT, Hindustan Fertilizer Corporation, Madras Fertilizers, NFL, RCFL, FCI and PDIL collectively made a net profit of over Rs 1,000 crore during 2020-21. During 2019-2020, these eight units had reported profit of over Rs 850 crore.



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