MUMBAI: The Fertiliser Association of India (FAI) today said the annual budget of the new government was rather disappointing for the fertiliser sector.
"The fertiliser industry has been facing severe liquidity crisis due to insufficient allocation of funds for subsidy. This year's budget again leaves a gap between the requirement and allocation of funds of at least Rs 25,000 crore.
"Funds will again be exhausted in the middle of the year and yet again, the industry will have to pursue with the government for allocations through supplementary grants or for bank loans as a last resort," FAI said in a statement here.
Speaking on the import and tariff policy, Satish Chander, Director General, FAI said, "The disappointing aspect is ignoring the request of industry for rationalising the import duties on raw materials for production of phosphatic and potassic fertilisers.
"The domestic industry is facing unfair competition from imports when import duties on raw materials are equal to those for finished products. This defies the basic tenet of tariff policy that duty on inputs should be lower than finished products when both are freely imported."
This is highly discouraging for the phosphatic and potassic (P&K) fertilisers manufacturers in the country, he said adding that this is even more surprising because the government has reduced import duties on imports for other sectors including chemicals and petro chemicals.
However, FAI praised the government for highlighting the imbalanced use of fertilisers in both the Economic Survey and Budget speech of the Finance Minister.
The imbalanced use of fertilisers, domestic industry is suffering under the present pricing policy and the industry is at the brink of sickness. But the industry is hopeful that the government proves true on its statements and brings reforms in the urea sector, so that the instrument of fertiliser subsidy is utilised to promote balanced use of fertilisers for higher agriculture productivity, it said.
Chander pointed out that the FAI welcomed government's intention to work for direct transfer of subsidy to farmers.