The Comptroller and Auditor General (CAG) has initiated an all-India performance audit of the fertiliser subsidy to look into the alleged diversion of subsidised urea in at least 169 districts across 15 states, including the possibility of diversion outside the country, The Times of India has reported.

Source: The Times of India

The audit, which started in May this year, is likely to be completed by mid-2027, with its findings expected to be tabled in Parliament during the winter session. It will assess the demand for urea as well as the efficiency of the urea subsidy framework, which forms part of its terms of reference.

The CAG selected 149 of the districts on the basis of consumption patterns above the state and national averages, and later added 20 more districts in Karnataka, Rajasthan, Madhya Pradesh and Maharashtra for further examination. Uttar Pradesh accounts for the highest number of districts under assessment at 37, followed by 16 each in Bihar and Tamil Nadu, and 14 each in Punjab and Gujarat.

India consumes roughly 400 lakh metric tonnes of urea a year, with more than 100 lakh tonnes imported, and the government spends over Rs 2 lakh crore annually on subsidised urea alone. Because agricultural urea is subsidised without any limit linked to farm size or farmer income, officials suspect part of the supply leaks away from farms.

Technical-grade urea is used as a raw material in industries such as resins and adhesives, plywood, tableware, livestock feed and commercial explosives. The audit will also examine the fertiliser movement mechanism, transport arrangements, freight subsidy and the monitoring and control system, including suspected movement through border districts in Uttar Pradesh, Rajasthan, Punjab and Bihar. These are suspicions under examination, not established findings.

The CAG has not yet published any finding on how much urea, if any, was actually diverted; the exercise is an audit in progress, and its conclusions will be known only when the report reaches Parliament.