HYDERABAD: The Fertilizer Association of India (FAI) has favoured deregulating this sector to operate it in a competitive manner to attract fresh investments.
A day ahead of three-day seminar on ‘Fertilizer policy for sustainable agriculture’ organised by it here, the FAI felt that the industry has been left high and dry with un-remunerative margins amid stringent controls due to unreasonable tightening of pricing norms.
FAI chairman K. S. Raju and co-chairman A.Vellayan at a press conference here on Wednesday demanded for deregulation. Mr. Raju, who also heads the Nagarjuna Fertilizers and Chemicals Limited, said while most industries benefitted from the process of liberalisation started in 1991, reforms completely bypassed this sector. Fertilizer price policy has so far been looked in isolation and a holistic approach to resolve the interlinked problems of agriculture, fertilizer and energy sector has been missing, he noted.
He lamented that every aspect of fertilizer including cost of production, distribution, selling price was determined by the government leaving hardly any scope for initiating innovations. “Investors are shying away from this sector,” he said.
Mr. Vellayan representing Coromandel International Limited said the industry has suffered due to inordinate delay in disbursement of subsidy and payment of a large amount in the form of bonds in lieu of cash. The delayed payments add to the woes of the industry increasing its working capital requirement and cost.
He stated that the fertilizer policies need a fresh look not only for containing the ballooning subsidy but to restore the health and growth of the domestic industry.
Director General FAI Satish Chander said the shortfall of fertilizer production was a whopping 12 million tonnes, which was covered through imports. “If deregulation is allowed the existing capacity can be enhanced. We need an investment of Rs. 35,000 crores on expansion and reviving the defunct units,” he added.