Out of the total approved outlay for PSUs and cooperatives under fertiliser department for continuing schemes as well as new schemes, the provision of budget support from the Government was to the extent of Rs 929 crore. The balance was proposed to be funded by PSUs and cooperatives concerned from their own resources.

Out of the total approved outlay of Rs 11,013 crore, the Krishak Bharti Cooperative (Kribhco) had been allotted a major share of Rs 3,253 crore, the Indian Farmers' Fertiliser Cooperative (IFFCO) had been allotted Rs 2,720 crore, the Rashtriya Chemical Fertilisers (RCF) had been allotted Rs 2,700 crore and the National Fertilisers Limited (NFL) had been allotted Rs 1,118 crore. However, all the PSUs and the cooperatives together managed to utilise only Rs 2,450 crore between 1997-2000.

In a clarification to the parliamentary standing committee on petroleum and chemicals, the fertiliser department said that the primary reason for low expenditure was the fact that the four mega fertiliser projects which were given approval by the Cabinet Committee on Economic Affairs (CCEA) could not be finalised. They include Iffco's urea project at Nellore, Kribhco's project at Gorakhpur, RCF's project at Thal and Kribhco's Hazira expansion.

The estimated amount sanctioned to the company's for these projects was Rs 5,900 crore.

Fertilisers secretary AV Gokak said that the projects had been cleared by the Government in principle and had been sent to the Public Investment Board (PIB). The PIB in turn had also appraised the projects and the projects were at the last stage of clearance. Another reason for low utilisation of funds is the non-finalisation of the Indo-Oman fertilisers project. The secretary said that the PIB was considering this project too and all that was now required was a decision from `the top.'

Gokak clarified that the Indo-Oman project had not been shelved and was under consideration. He added that the project had a lot of strategic importance. The secretary added that the project would be very useful because natural gas reserves within the country will soon get depleted and the option of using naptha would be unviable as it is very expensive. He said that the cost of production in Oman will be much lower as compared to India because the Sultenate had agreed to supply gas at a much cheaper rate.

Despite the low utilisation of funds, the secretary said that the country had been steadily building up production capacity for fertilisers and had achieved near self-sufficiency in production of nitrogenous fertilisers. Production of phosphatic fertiliser had also increased from 23.06 lakh tonne in 1992-93 to 33.45 lakh tonne in 1999-2000. The standing committee pointed out that it was important to synchonise proper planning and uniform spending during the plan period and such irregularities are not healthy.

Gokak said the department had instructed PSUs to expeditiously sanction new schemes which fall within their delegated powers. It had also taken steps to strengthen the project implementation and monitoring set up in the PSUs.

The measures taken include nomination of the nodal officers responsible for timely implementation of the projects and institution of a mechanism for information sharing amongst the organisations so as to ensure that the deficiencies noticed in the project implementation do not recur. The secretary said that a decision on the delayed projects was likely to be taken within two and a half months.