The Hindu Business Line : Dues to fertiliser cos may cross Rs 11,500 cr

According to the Union Minister for Chemicals and Fertilisers, Mr Ram Vilas Paswan, the total fund requirement for payment of subsidy/concession to the fertiliser industry (including importers) during 2006-07 has been estimated at Rs 34,035.75 crore. This includes a sum of Rs 5,913 crore carried over from the previous fiscal.

But on the other hand, the Finance Ministry had made a budgetary provision of only Rs 17,252.91 crore. Even after adding the funds made through two supplementary demands for grants, the total amount made available has been only Rs 22,452.91 crore. That leaves a gap of Rs 11,582.84 crore, compounding the liquidity problems of the industry.

Inadequate Compensation

"The Department of Fertilisers in making all efforts with the Ministry of Finance to ensure adequate availability of funds in the third supplementary to minimise the carry forward beyond the current fiscal," Mr Paswan said at a press meet here on Saturday. He admitted that the inadequate compensation to fertiliser companies had resulted in nutrient shortages in various parts of the country.

During 2006-07, the country's urea imports are expected to touch a record 50.04 lakh tonnes (lt), against 20.57 lt in 2005-06, 6.41 lt in 2004-05 and nil in the previous year. Imports of di-ammonium phosphate (DAP), too, are slated to go up to 28.59 lt this fiscal, up from 24.38 lt in 2005-06, 6.44 lt in 2004-05 and 7.34 lt in 2003-04.

Indigenous production, on the other hand, will be 200.37 lt for urea and 49.58 lt in the case of DAP. The total requirement of urea is expected at 249.45 lt (against projected sales of 240.74 lt) in 2006-07, against 234.25 lt (221.91 lt) in 2005-06.

Similarly, DAP demand would rise from 78.06 lt to 81.29 lt, with corresponding sales being 67.51 lt and 80.25 lt, respectively.