Business Daily from THE HINDU group of publications
Tuesday, Dec 12, 2006
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Business Daily from THE HINDU group of publications Tuesday, Dec 12, 2006 ePaper |
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Fertilisers Corporate - Performance Fertiliser subsidy dues top Rs 10,000 crore Harish Damodaran
Awaiting payments Rs 2,247.24 crore owed toIffco, another Rs 1,003.03 crore to its subsidiary, Indian Potash Ltd. The K.K. Birla Group has piled up receivables totalling nearly Rs 1,500 crore.
New Delhi , Dec. 11 Outstanding subsidy reimbursement claims on the Union Government by fertiliser companies have mounted to over Rs 10,000 crore.
Payment arrears
While the Centre has provided around Rs 23,000 crore as subsidy on account of urea and decontrolled fertilisers for 2006-07 — including Rs 5,800 crore through supplementary demands for grants moved during the monsoon and ongoing winter sessions on Parliament — the actual reimbursement claims due to higher feedstock prices and consumption levels may be in the region of Rs 35,000 crore. That would take payment arrears to fertiliser companies by the end of the current fiscal to roughly Rs 12,000 crore — twice the sum that was carried over from 2005-06. It could create a situation similar to oil, where public sector petroleum marketing companies had to be issued special bonds in order to bail them out of a liquidity crunch. In fertilisers, too, it is mainly the public sector and cooperative entities that are bleeding due to the Centre mandating them to sell nutrients at virtually unchanged maximum retail prices without adequately compensating for cost escalations. Of the estimated Rs 9,538.55 crore pending payments to the industry as on end-October, as much as Rs 2,247.24 crore is owed to Indian Farmers Fertiliser Cooperative (Iffco), besides another Rs 1,003.03 crore to its subsidiary, Indian Potash Ltd.
State-owned cos
Among the state-owned companies, the worst hit are National Fertilizers Ltd (Rs 870.21 crore), Rashtriya Chemicals & Fertilizers (Rs 750.61 crore) and Gujarat Narmada Fertilizers Company (Rs 304.45 crore). But it is not only the public sector and cooperatives that are at the receiving end of the Finance Ministry's fiscal austerity measures.
K.K. Birla cos
Take the K.K. Birla Group, whose three companies — Paradeep Phosphates (Rs 554.01 crore), Zuari Industries (Rs 518.69 crore) and Chambal Fertilisers and Chemicals Ltd (Rs 420.60 crore) — have piled up receivables totalling nearly Rs 1,500 crore. Or, the Murugappa Group's Godavari Fertilisers and Chemicals Ltd (Rs 451.45 crore) and Coromandel Fertilisers Ltd (Rs 369.30 crore).
Others
The other companies whose payments against bills submitted till October are pending include Mr K.S. Raju's Nagarjuna Fertilisers and Chemicals (Rs 377.48 crore), Mr A.C. Muthiah's Southern Petrochemical Industries Corporation (Rs 308.55 crore), Mr Ajay S. Shriram's DCM Shriram Consolidated (Rs 281.92 crore) and Mr Vijay Mallya's Mangalore Chemicals & Fertilisers Ltd (Rs 217.53 crore). "Unlike the oil bonds that carry coupons of up to 7.75 per cent, we are not expected to get any interest on our blocked monies", an industry source pointed out.
Related Stories: More Stories on : Fertilisers | Performance
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