Fertiliser sector needs Rs 40,000 crore for payment crisis: Fertiliser Association of India

NEW DELHI: The fertiliser sector needs Rs 40,000 crore to address the current payment crisis due to subsidy overdues, an industry body said.

"The government needs to take immediate steps address the current payment crisis. Rs 40,000 crore needs to be allocated immediately to clear subsidy dues for 2013-14.

"Adequate budget allocations for 2014-15 should be made keeping in view realistic estimate for the year and the backlog if any carry forward from 2013-14," Fertiliser Association of India (FAI) Chairman R G Rajan said.

He was speaking at the curtain raising event of the annual fertiliser conference to be organised here from December 11-13.

FAI Director General Satish Chander said that total subsidy requirement for this fiscal is around Rs 1,05,000, whereas government has allocated only Rs 65,000 crore. Subsidy for the indigenous urea has already been exhausted.

The government has marginally reduced the fertiliser subsidy to Rs 65,971.50 crore for the 2013-14 fiscal from the revised estimate of Rs 65,974 crore in 2012-13.

Of this, the government will provide Rs 15,544.44 crore for imported urea, Rs 21,000 crore for indigenous (urea) fertilisers, and Rs 29,426.86 crore for decontrolled fertilisers (DAP, MOP and complexes) for supplying the inputs to farmers at a subsidised rate.

Speaking at the same event IFFCO Joint Managing Director Rakesh Kapur said, "It is high time that the government makes provision for interest on delayed subsidy payments."

Meanwhile, on behalf of the industry, the FAI has filed a petition in the Delhi High Court seeking 14.75 per cent interest on the delayed subsidy payments.