CAPACITY BUILD-UP

5.1.1 The installed capacity and production of fertilizers in the country from the end of Seventh Five Year Plan, in the terminal year of the Eighth Plan and in the first and second year of Ninth Plan (1997-98 and 1998-99) are indicated below:

(In Lakh Tonne)

Particulars	At the end of Seventh Five Year Plan (1989-90)	At the end of Eighth Five Year Plan (1996-97)	In the first year of Ninth Plan (1997-98)	In the 2nd year of Ninth Plan (1998-99)
Fertilizers
1. Capacity             i) Nitrogen        ii) Phosphates
	81.48	97.77	104.98	105.20
	27.50	29.05	29.51	31.70
2. Production         i) Nitrogen        ii) Phosphates
	67.47	85.99	100.86	104.52 (Est)
	17.96	25.56	29.76	30.02 (Est)

5.1.2 The installed capacity of nitrogen and phosphate in the terminal year (1996-97) of the Eighth Plan was 97.77 lakh MT and 29.05 lakh MT, respectively. Due to the uncertainty in the wake of decontrol of phosphatic fertilizers, no major phosphatic fertilizer plant was commissioned during the Eighth Plan period. The production of fertilizers during 1998-99 is estimated at 104.52 lakh MT of nitrogen and 30.02 lakh MT of phosphate. Sector-wise targets and achievements in respect of production and capacity utilisation from 1993-94 onwards are given in Annexure-V & Annexure-VI.

PLAN OUTLAYS - A REVIEW

5.2.1 An outlay of Rs.5484 crore was provided for various schemes to be undertaken during the Eighth plan period (1992-97) by the Department of Fertilizers and the public and cooperative sector undertakings under its administrative control. Out of this, Rs.4466 crore was to be met out of internal and extra budgetary resources and the balance amount of Rs.1018 crore was to be provided through budgetary support. The actual expenditure during the Eighth Plan was Rs.4952.98 crore.

5.2.2 For the Ninth Plan (1997-2002), Planning Commission has approved an outlay of Rs.11,447.37 crore consisting of Rs.800 crore as Domestic Budgetary Support, Rs.298.29 crore as External Aid routed through Budget and Rs.10,349.08 crore to be met out of Internal and Extra Budgetary Resources.

5.2.3 For the year 1997-98, a Plan outlay of Rs. 1728.38 crore was approved by the Planning Commission, with Rs.1488.60 crore to be met out of internal and extra budgetary resources and the balance amount of Rs.239.78 crore to be provided through budgetary support. As against this, the actual expenditure for 1997-98 was Rs.1324.38 crore. For the year 1998-99, a Plan outlay of Rs.2249.20 crore was approved by the Planning Commission with Rs.2040.00 crore to be met out of the internal and extra budgetary resources and balance amount of Rs.209.20 crore to be provided through budgetary support. As against this, the actual expenditure upto November 1998 was Rs.384.83 crore. For 1999-2000, the Planning Commission has approved a plan outlay of Rs.1828 crore, with Rs.1663 crore to be met out of internal and extra budgetary resources and the balance amount of Rs.165 crore to be provided through budgetary support. The details of Plan outlays are given in Annexure-VII.

BUDGETARY SUPPORT

5.3.1 For the year 1998-99, there is a net provision of Rs.7600.39 crore (Rs.209.20 crore for Plan and Rs.7391.19 crore under Non-Plan). In the revised estimates for 1998-99, the net provision is Rs.9321.22 crore (Rs.195.46 crore under Plan and Rs.9125.76 crore under Non-Plan). For the year 1999-2000, there is a net provision of Rs.9221.17 crore ( Rs.165.00 crore under Plan and Rs.9056.17 crore under Non-Plan). The details of Non-Plan and Plan provisions in B.E. 1998-99, R.E. 1998-99 and B.E. 1999-2000 are given in Annexure-VIII.

FINANCIAL PERFORMANCE OF PUBLIC SECTOR UNDERTAKINGS AND SOCIETIES

5.4.1 The Department has nine public sector undertakings and two cooperative societies under its administrative control. One of the undertakings, viz.PDIL, is engaged in consultancy services in design, engineering and implementation of fertilizer projects and production of catalysts. Another undertaking (PPCL) is engaged in mining operations of rock phosphate and pyrites, besides the manufacture of SSP.

5.4.2 While four of the public sector companies (RCF, FACT, MFL and NFL) and the two co-operative societies (IFFCO) and (KRIBHCO) have generally been making profits, two public sector companies (HFC) and (FCI) have been incurring losses right from their inception, mainly due to design and equipment deficiencies and excess manpower.

5.4.3 Madras Fertilizers Ltd., which had consistently been recording profit in the past, recorded a heavy loss during 1993-94 following the decontrol of phosphatic fertilizers. During 1994-95, 1995-96, 1996-97, MFL showed profits. But during 1997-98, it showed a heavy loss amounting to Rs.55.35 crore. During 1998-99, the company is likely to make a loss of Rs.33.63 crore. PPCL, which had been making marginal profits upto 1991-92, has been showing losses since 1992-93 due to decontrol of phosphatic fertilizers. Capital restructuring of the company was undertaken during 1995-96 and it was hoped that the financial prospects would improve. But no reversal has been shown by the company. PDIL, which is essentially a design and consultancy company, had been making losses in the past, but of late, its profitability has improved with the resurgence in the fertilizer sector. During 1997-98, it showed a profit of Rs.6.09 crore. Again due to slow down in the flow of new fertilizer projects, the profitability of PDIL has been affected and during 1998-99, the company is likely to make a loss of Rs.3.07 crore. PPL, which is a comparatively new company, had incurred losses in the earlier years mainly due to raw material constraints, equipment problems and heavy debt servicing burden. A turn around proposal for PPL was approved w.e.f. 1.4.1994. Thereafter, the company recorded profits till 1995-96. However, it has again been showing a substantial loss. During 1997-98, the company made a loss of Rs.105.53 crore. During 1998-99, the company is likely to make a loss of Rs.65 crore. FACT, which has been making profit for the last several years is likely to make a loss of Rs.50.88 crore during 1998-99. This is due to high interest burden on account of the new Ammonia Plant project and depressed market for caprolactam coupled with its cheaper import.

5.4.4 Company-wise details of profitability from 1991-92 along with likely estimates for 1998-99 are given in Annexure-IX.