Fertiliser sector calls for decontrol

The Fertiliser Association of India (FAI) has urged the government to decontrol the sector and bring urea under the nutrient-based subsidy (NBS) scheme to aid balanced use of fertilisers.

"It is time the government decanalised the import of urea and made it open. Now it is only the government that imports," FAI chairman S.S. Nandurdikar told media persons Monday evening at a meeting here.

"While urea needs to be brought under NBS to discourage its excessive use, the scheme also needs to be implemented in true spirit for other fertilisers, to allow the industry take long term business decisions," he added.

"The government should act as a regulator and facilitate investment in building production capacities in the country. The present government has also said in unequivocal terms that there is an excess usage of urea, leading to wastage of Rs.8,500 crore during 2013-14," he said.

"It has been brought to the notice of the government that import duty on raw materials should be significantly lower than that for finished products as in fertilisers the duty on most of the imported raw materials is the same as for finished products," Nandurdikar said.

A major grievance of the industry concerns insufficient budgetary allocations for the sector.

There is under-allocation of funds for domestic urea production and over allocation for imported urea, he said.

"Additional allocation of Rs.30,000 crore through supplementary grants should be made to clear the subsidy back log and make provision for payment of bills up to February 2015," said S. Nand, deputy director general of FAI.

Payments procedures have been made so cumbersome that subsidy bills are pending since December 2012 and freight bills since 2008-09.

"There is also a need for the provision of paying interest on delayed payments of subsidy beyond a stipulated time," Nand added.

"The cost of production of urea produced beyond the cut-off limit is so high that it will not be profitable if sold at market price. This goes against the basic premise of encouraging domestic production and the government's 'Make in India' campaign," FAI secretary general Satish Chander told IANS.