Budget-2025 announces new fertiliser plant in Assam, but there's a catch
Proposed unit has been in the pipeline since 2006, and after several unfulfilled promises, the budget announcement is being taken with a pinch of salt
Finance minister Nirmala Sitharaman’s announcement about setting up a new fertiliser plant in Assam in her budget speech on Saturday (February 1) seems to have a catch.
The proposed new unit has been in the pipeline since 2006, Tileswar Bora, the advisor to Namrup Fertilizer Shramik Union told The Federal.
The Brahmaputra Valley Fertiliser Corporation Limited (BVFCL) in Assam’s Namrup is one of India's oldest gas-based urea production factories. Currently it has three units, out of which only one is functional.
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Unfulfilled promises
To keep the factory alive, the government has been promising to set up a fourth unit but has not made any move in that direction.
The then Union minister of chemicals and fertilisers, Ram Vilas Paswan, first made the announcement in 2006. After much dilly-dallying, the Centre came up with a proposal to set up an ammonia urea complex in 2015.
After the failure of the plant, the government in 2019 again announced setting up a new ammonia-urea plant at the BVFCL with a production capacity of 12.70 lakh metric tonnes.
Soon after the announcement, the then Union minister Sadananda Gowda even visited the factory in Namrup and promised to start the construction work by December 2019.
In response to an RTI application, the BVFCL had informed in 2022 that a joint venture company which was to be formed to set up the fourth plant was under the government of India's consideration.
Revitalisation of defunct plants
The proposed new plant will produce 12.7 lakh metric tonnes (MT) of urea every year, the finance minister announced, almost echoing the promise made by Gowda over five years ago.
Apart from the new unit, Sitharaman also promised revamping three old units, two of which are defunct.
The first urea production plant in the factory was established in 1969 followed by the second plant in 1976. Both the plants are no longer in operation.
The third plant set up in 1987 is only in operation. But its production capacity is constantly declining due to outdated machinery.
As per the available data, the urea production in the third unit dropped to 1.80 lakh MT in 2023-24 from 2.23 LMT in 2022-23. The revitalisation of the BVFCL is crucial to meet the fertiliser requirement of the region in particular and the country in general.
India annually needs around 350 lakh tonnes of urea and produces around 310 lakh tonnes, leaving a shortfall of around 40 lakh tonnes.
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‘Gamechanger for north-east’
Meanwhile, Assam chief minister Himanta Biswa Sarma called the new fertilizer unit "a gamechanger".for the entire north-east.
"What a historic day for Assam! #UnionBudget2025 has announced a 12.7 lakh MT urea plant in Namrup, a long standing demand of the people of Assam. After the semiconductor plant in Jagiroad, this urea facility will be a game changer for the entire North East. It will not only help us achieve self sufficiency in fertilizer availability but also better channelise our natural gas resources. On behalf of the people of Assam my heartfelt gratitude to Hon’ble Prime Minister Shri @narendramodi Ji and Hon’ble Finance Minister Smt @nsitharaman Ji,” the chief minister posted on X.
Empty assurances?
However, many are not at all convinced.
The Assam Jatiya Parishad (AJP) questioned the sincerity of the finance minister’s proposal in the absence of a lack of budgetary allocation.
AJP president Lurinjyoti Gogoi and general secretary Jagadish Bhuyan in a statement said that it is unclear from the announcement whether “this refers to the previously announced fourth unit or an entirely new proposal. Moreover, no specific budgetary allocation has been mentioned, raising doubts about the seriousness of the claim.”
“This is not the first time such an announcement has been made. Yet, no progress has been made. Without a budget allocation, how realistic is this proposal?” they asked.
