I am compelled to bring to your urgent notice the large scale corruption that has taken place in the Vaigai Chemical Industries Limited and the Karaikal Chlorates Limited, Karaikal, Puducherry Union Territory, by their smuggling activities with regard to potash supplied at concessional rates to farmers.

You may be aware that potash is a key ingredient in fertilizers as it enhances water retention of plants, increases crop yields and plants' disease resistance. Since there are commercially no viable sources of potash in the country, our entire requirement is met through imports.

On behalf of the Government of India, Indian Potash Limited,
a Government of India Undertaking, is importing 40,000 MT of potash per month from Russia and Israel at a cost of Rs. 15,000/- per MT via Thoothukudi, Kakinada and Mangalore Ports and distributing the product through their network to the farmers in India at a concessional rate of
Rs. 5,000/- per MT.

The same potash is also being used as a raw material for the production of Potassium Chlorate (KCLO3). This Potassium Chlorate is the main raw material for the Safety Match Industry and the Fire Works Industry. It is also used in the manufacture of explosives.

There are two chemical industrial units in Karaikal, the Union Territory of Puducherry, namely, Vaigai Chemical Industries Limited and Karaikal Chlorates Limited. Karaikal Chlorates started functioning from 5.9.1991 and Vaigai Chemical Industries from 10.7.1994. It has been brought to my notice that Vaigai Chemical Industries Limited is producing 40 MT of Potassium Chlorate per day, though its installed capacity is 9 MT per day. Karaikal Chlorates Limited, another Chemical Company in Karaikal is also producing 60 MT of Potassium Chlorate per day as against its permitted quantity of 16 MT per day. Both these companies have been possessing stocks far beyond their production capacity. This has led to a suspicion
vis-a-vis the source of supply of potash to these industries.

During a surprise inspection by the officers of the Agriculture and the Revenue Departments of the Government of Puducherry, 2000 MT of potash were seized from the above Companies and the factories have been sealed. An FIR has been filed against the above mentioned Companies.

It has also been reported that the above said Companies have been smuggling potash meant for the farmers from various parts of India at the rate of Rs. 5,000/- per MT with the connivance of the Congress Government in Puducherry and the minority DMK Government in Tamil Nadu. In this connection, it is pertinent to point out that the Companies have to pay a sum of Rs. 36,000/- per MT towards the purchase of potash and the Companies are not supposed to possess stocks beyond their rated production capacity. It has further been reported that the above Companies have been in the habit of selling potassium chlorate to various agencies for the purpose of making explosives.

I understand that there exists a network of Potassium dealers in Tamil Nadu apart from the factories at Karaikal. The potash meant for agriculturists in Tamil Nadu has been diverted to these industries and they have made huge profits by indulging in these clandestine activities.
These activities have been going on for quite a long time.

In view of the large scale irregularities committed by the above mentioned Companies with the help of the Puducherry and Tamil Nadu Governments, the Government of India has so far incurred a loss of nearly Rs. 4,000/- crores and this has paved the way for an artificial shortage of fertilizers thereby affecting our Country's agricultural production. At the cost of our poor farmers, these Companies have been making huge profits with the connivance of politicians. This malpractice is done systematically in the States ruled by the Congress and the DMK Governments. As many States are involved in this fraud, it is essential that the Central Bureau of Investigation should probe the matter to unravel the truth.

In the meanwhile, an attempt is being made by the two Companies with the help of the Puducherry and Tamil Nadu Governments to have the above mentioned factories opened.

I, therefore, request you to kindly order a CBI enquiry into the matter to put an end to the irregularities that are taking place and bring the culprits to book.