Concerned over acute liquidity crunch faced by the Indian fertiliser sector, fertiliser ministry has sought additional Rs 35,000 crore funds towards subsidy payment to companies. Fertiliser Minister Srikant Jena in a letter written to government has said that in order to address present liquidity concern of the sector, there is a need of immediate release of extra funds as the Department of Fertiliser (DoF) did not get funds under the first supplementary grants and second supplementary grants would be made available only in December. The DoF has been able to pay subsidy dues till May to fertiliser firms manufacturing urea locally, while for non-urea fertilizers, it can pay subsidy only till this month.
So far this fiscal, the DoF has been allocated Rs 70,586 crore funds towards subsidy payment to fertiliser firms against the total demand of Rs 1,05,497 crore for the 2013-14 fiscal. Rising fears for closure of two state-run firms, the fertilizer ministry added that state-run National Fertilisers Ltd (NFL) and Madras Fertilisers Ltd (MFL) could face closure by the end of this month due to liquidity crisis. Furthermore, private fertilizer firms are also facing the liquidity crunch as the government has exhausted its funds towards subsidy payment on indigenous urea.
Earlier in September, the Finance ministry had agreed to pay only Rs 5,500 crore subsidy under a special banking arrangement (SBA) as against Rs 12,000 crore sought by the Department of Fertilisers (DoF). Meanwhile, in order to support the industry, the Fertiliser Association of India (FAI) has recently filed a petition in the Delhi High Court seeking 14.75 percent interest on the delayed subsidy payments.
So far this fiscal, the DoF has been allocated Rs 70,586 crore funds towards subsidy payment to fertiliser firms against the total demand of Rs 1,05,497 crore for the 2013-14 fiscal. Rising fears for closure of two state-run firms, the fertilizer ministry added that state-run National Fertilisers Ltd (NFL) and Madras Fertilisers Ltd (MFL) could face closure by the end of this month due to liquidity crisis. Furthermore, private fertilizer firms are also facing the liquidity crunch as the government has exhausted its funds towards subsidy payment on indigenous urea.
Earlier in September, the Finance ministry had agreed to pay only Rs 5,500 crore subsidy under a special banking arrangement (SBA) as against Rs 12,000 crore sought by the Department of Fertilisers (DoF). Meanwhile, in order to support the industry, the Fertiliser Association of India (FAI) has recently filed a petition in the Delhi High Court seeking 14.75 percent interest on the delayed subsidy payments.
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