Jaya asks PM to drop Alagiri for subsidy scam
‘Alagiri’s silence only confirms his complicity’
Tamil Nadu Chief Minister J Jayalalitha has demanded a CBI investigation into the ‘huge fertilizer subsidy scam’ stemming from the new ‘Nutrient-based Subsidy (NBS)’ policy.
She urged the Prime Minister to “drop” the Fertilizer and Chemicals Minister M K Alagiri of the DMK from the Union Cabinet, pending the probe.
Joining issue on this controversy, Jayalalitha in a statement here on Thursday said that Alagiri’s “mum” over the charges made against him in a recent media expose “only seemed to confirm his complicity” in not taking necessary corrective steps as the Union Fertilizer Minister, despite several “notes” sent by his State Minister Srikant Jena, on fertilizer companies making “windfall” profits at the expense of farmers and resulting in a Rs 1000 Crores loss to the exchequer.
Fertilizer firms, depending on the subsidy amount, were compensated for the difference between their cost price and MRP.
However, with the Centre introducing the new ‘NBS’ scheme from April 1, 2010, Jayalalitha said the methodology has changed. Now the Centre pegged the quantum of NBS amount for each fertilizer at a certain level in the year beginning, even while allowing fertilizer firms to ‘readjust’ the MRP of fertilizers. Since the new NBS policy came into force, the fertilizer prices have only gone up.
Stating that she had already written to the Prime Minister last year to rescind the new NBS policy and revert to the more farmer-friendly earlier policy in subsidizing the cost of fertilizers to them, Jayalalitha said Singh seemed to have taken no action in this regard so far. However, the new policy regime has given elbow room to the fertilizer companies to make ‘huge profits’ at farmers’ expense, she charged.
Quoting recent media reports, the AIADMK leader said that in June 2012, the Central Government fixed the subsidy for DAP at Rs 14,300 per tonne and paid the same to fertilizer companies, even as they sold one tonne of DAP (to farmers) at a retail price of Rs 25,000 per tonne.
But around the same time, the cost of imported DAP was only Rs 31,900 per tonne. Even factoring in transportation and distribution charges, the fertilizer companies made “unexpected windfall gains” to the extent of Rs 5,000 per tonne of DAP sold, Jayalalithaa pointed out.
Jena’s “notes” to Mr Alagiri were aimed at plugging such loopholes to curb fertilizer companies “profiteering” from such price differences, but the DMK Minister took no action, she alleged.
“So, this has given rise to suspicion among the people whether the Centre’s new NBS policy itself was to facilitate corruption in the fertilizer subsidies disbursal,” Jayalalita said and demanded a thorough CBI probe into the charges that have surfaced against the DMK nominee in the Union Cabinet.