On Verge Of Extinction
The largest lobby for fertilizer groups operating in India, Fertilizer Association of India (FAI) is all set to commence its annual seminar. FAI has shared its views and thrown light on the requirement of total fertiliser nutrients in India that will be approximately 60 million tonnes by 2020 (the year when India will become world’s most populous nation). FAI has also made it clear that the combination of chemical fertilizer will be 45 million tonnes in comparison to 15 million tonnes of bio and organic fertilizers. The data is believed to be a projection against the 34 million tonnes of current nutrient needs. Raising the serious concern over the unrevised fixed cost of urea to be reimbursed on the basis of 2003-04 cost data FAI termed the fertilizer industry as an endangered one. There has been no freedom to revise the fix costs, FAI has put forth the steep increase in fixed cost elements since 2003-04 that has largely remain unrecognised and unpaid. While the other sectors had been given special packages, the association is still fighting for revival of one and a half-decade old fixed costs.
The story does not end here as the FAI has also serious concerns over the major payment related issues. For instance implementation of Direct Benefit Transfer (DBT) had assured weekly payment of the transfer. As per the fertilizer body the assurance is not kept due to persistent budget constraints. Implementation of DBT has postponed subsidy payment by another six months due to its linkage with the sale of fertilizers through the Point of Sale (POS) machines where it was used to be paid on the receipt of material in the district as earlier practice. Almost 25 fertilizer companies had provided the information with a total of Rs 33, 691 crore dues were pending as on first of November this year. Out of the total dues reported by these groups a huge sum of 20,434 crore are under DBT and a considerable amount of 12, 838 crore is due other than DBT. The pending payments are enough to send alarming signals as slowly the domestic fertilizer groups are inching towards being extinct with more than Rs 40, 000 crore investments had already been made for the revival of around five closed fertilizer units.
