The Parliamentary Standing Committee on Chemicals and Fertilizers has rejected the Finance Ministry’s move to classify the fertiliser sector as “non-strategic” for disinvestment. Instead, the Committee urged the government to revive and modernize central public sector enterprises (PSUs) in the fertiliser industry before considering any stake sale.
In a report presented to the Lok Sabha on 20th August, the Committee stressed that all nine fertiliser PSUs should be treated as national assets. It highlighted their importance for India’s food sovereignty, climate resilience, and rural economy.
Fertiliser PSU Performance
Of the nine central PSUs in the fertiliser sector:
Profitable listed companies: National Fertilizers Ltd, Rashtriya Chemicals and Fertilizers Ltd, Fertilizers and Chemicals Travancore Ltd (FACT), and Madras Fertilizers Ltd.
Profitable unlisted companies: FCI Aravali Gypsum Minerals Ltd and Projects and Development India Ltd (engineering and consultancy).
Loss-making PSU: Brahmaputra Valley Fertilizer Corporation Ltd.
Non-operational PSUs: Hindustan Fertilizer Corporation Ltd and Fertilizer Corporation of India Ltd.
DIPAM’s Stand vs Committee’s View
The Department of Investment and Public Asset Management (DIPAM) had placed fertilisers under the “non-strategic” category in the New Public Sector Enterprise (PSE) Policy. DIPAM argued that fertiliser PSUs account for only 25% of urea production and 11% of non-urea production. It also pointed out that several companies are loss-making and inconsistent with fiscal prudence.
However, the Parliamentary panel strongly disagreed. It said this reasoning conflicted with the government’s vision of Atmanirbhar Bharat. The panel noted that many fertiliser PSUs have shown significant turnaround. For instance, FACT has transformed from a loss-making entity into a consistently profitable company.
The Committee also highlighted the successful revival of closed units at Gorakhpur, Sindri, Barauni, and Ramagundam. These CPSE-led joint ventures added more than 76.2 Lakh Metric Tonnes (LMT) to India’s annual urea production capacity. The panel called this revival a clear example of how PSU assets can play a strategic role in ensuring food security and reducing import dependency.