Faced with liquidity crunch, fertiliser industry body FAI has written to Finance Minister Arun Jaitley seeking arrangement of funds to clear outstanding subsidy arrears, which are likely to crossRs. 40,000 crore by March-end.
In a letter to the Finance Minister, Fertilizer Association of India Director General Satish Chander has said that domestic urea manufacturers have not been paid since August, 2014. Therefore, a number of plants have resorted to shut down.
Mr Chander also pointed that while domestic fertiliser manufacturers suffer “due to non-payment of dues for months together, upfront payments are made to foreign suppliers”.
“The accumulated unpaid subsidy dues for entire fertiliser industry are likely to exceed Rs. 40,000 crore by March, 2015…Domestic urea manufacturers’ payment arrears will exceed Rs. 30,000 crore this year,” the letter said.
The industry body has also appealed the Minister to “intervene” and help with some arrangements including Special Banking Arrangement (SBA) of funds to tide over grave liquidity crisis of fertiliser companies.