Fertilizers play a key role in increasing soil fertility, crop productivity and meeting food demand for growing population of the country. The success of India’s green revolution and consequent self-reliance in food grain production is largely attributed to use of fertilizers. Government of India has been consistently implementing policies aiming to enhance production and availability of fertilizers at reasonable prices in the country. In order to ensure a reasonable return on investment and to facilitate healthy development and growth of fertilizer industry, Government of India in November 1977, introduced the Retention Price Cum Subsidy Scheme (RPS) for indigenous nitrogenous fertilizer units. The Scheme was later extended to phosphatic and other complex fertilizers in February 1979 and Single Super Phosphate (SSP) in 1982. From August 1992, the Government has progressively decontrolled the prices and distribution of phosphatic and other complex fertilizers. However, farm gate price of Urea is controlled by the Government whereas its distribution has been partially decontrolled from 1st April 2003.
The Retention Price Scheme (RPS) stimulated indigenous production and consumption of fertilizers in the country. To achieve greater internal efficiencies and global competitiveness, unit specific approach of RPS was replaced by a group based concession scheme called the New Pricing Scheme (NPS) from 1st April 2003. The Fertilizer Industry Coordination Committee (FICC) originally constituted on 1st December 1977 to administer and operate the Retention Price, has been reconstituted on 13th March 2003 for administration of the concession scheme under NPS.
Constitution of the Committee
The Committee consists of the following:-
- Secretary, Department of Fertilizers, Government of India, New Delhi.
- Secretary, Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India, New Delhi.
- Secretary, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, New Delhi.
- Secretary, Department of Expenditure, Ministry of Finance, Government of India, New Delhi.
- Secretary, Ministry of Petroleum and Natural Gas, Government of India, New Delhi.
- Chairman, Tariff Commission, Government of India, New Delhi.
In addition, the Committee has two representatives from the Fertilizer Industry.
Executive Director, Fertilizer Industry Coordination Committee, Department of Fertilizers, Government of India, New Delhi.
The scope and functions of the FICC are as under:
- To determine concession rates for units manufacturing nitrogenous fertilizer (Urea);
- To maintain accounts, to make subsidy payments to nitrogenous fertilizer companies.
- To undertake inspection of the fertilizers manufacturing units.
- To undertake costing and other technical functions.
- To collect and analyze production data, costs and other related information.
- To review the group concession rates periodically and to make adjustments in these rates, where necessary, with the prior concurrence of the Government.
- To undertake examination necessary for evolving group concession rates for future pricing periods;
- To work out requirement of inputs needed for fertilizer units & to recommend the supplies.
- To recommend annual escalation/de-escalation in the freight subsidy rates on the basis of transport index.
- To undertake such other functions as the Government may entrust to the Committee from time to time.
The FICC Office comprises five Divisions i.e. Cost Evaluation (CE) Division, Inputs Division, Finance & Accounts (F&A) Division, Technical Division and Administration Division.
The Cost Evaluation Division works out the concession rates for the various urea manufacturing units on quarterly & annual basis and revision thereof depending upon the variations in the cost of inputs from time to time. The Inputs Division undertakes an annual exercise for recommending escalation (or de-escalation) of freight rates for transportation of urea from plant gate to farmers on the basis of transport index. It is also responsible for allocation of coal to different coal based urea manufacturing units in consultation with Ministry of Coal and requirement of railway rakes in consultation with Ministry of Railways. The Finance & Accounts Division is responsible for payment of subsidy and maintenance of accounts. The Technical Division looks after all technical matters such as fixation of consumption norms, production levels, etc. The Administration Division is responsible for all matters pertaining to administration and establishment of FICC.