Fertiliser Min seeks extra Rs 35,000 cr funds to pay subsidies
New Delhi: Faced with liquidity crunch, the Fertiliser Ministry has sought additional Rs 35,000 crore funds towards subsidy payment to companies and also fears closure of two state-run firms.
The Department of Fertiliser 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.
In a letter written to Finance Minister P Chidambaram, Fertiliser Minister Srikant Jena has said the current situation is of "grave concern" and sought immediate release of an additional Rs 35,000 crore.
The letter 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.
Other private firms are also facing the liquidity crunch as the government has exhausted its funds towards subsidy payment on indigenous urea, the Minister said in the letter.
The Department of Fertiliser has been able to pay subsidy dues till May to fertiliser firms manufacturing urea locally. It can pay subsidy for non-urea fertilisers only till this month, the letter added.
The ministry has sought immediate release of extra funds because second supplementary grants would be made available only in December. It said the Department did not get funds under the first supplementary grants.
In September, the Finance Ministry had approved only Rs 5,500 crore against the demand of additional funds of Rs 15,500 crore under special banking arrangement.
Meanwhile, industry body Fertiliser Association of India has filed a petition in the Delhi High Court seeking 14.75 per cent interest on the delayed subsidy payments.