The Fertiliser Association of India (FAI) has dragged the Central Government to the Delhi High Court over delay in payment of subsidy.
“We have filed a case against the Department of Fertilisers on Wednesday for non-payment of subsidy in time,” Satish Chander, Director-General of the apex industry body, told reporters.
Cash flow of firms
As on March 31, 2013, the Government owes about Rs 31,500 crore to fertiliser makers and the payment delay has been affecting cash flows of the companies, he added.
“We are also seeking interest payment at the rate of 14 per cent on the subsidy arrears,” Chander said. The Department of Fertilisers is expected to reimburse the subsidy to the companies within 45 days after the fertiliser is sold.
Sales of fertilisers, both urea and non-urea complexes, are subsidised by the Government.
In case of urea, the Government pays subsidy to producers on the difference in cost of production or imports and the price is fixed. In case of non-urea complexes, the Government provides a fixed subsidy on the nutrients.
According to revised estimates, the Government had made a provision of Rs 65,974 toward fertiliser subsidy in 2012-13.
Budgetary provision
For 2013-14, the Government has made a budgetary provision of Rs 65,972 crore towards fertiliser subsidy. Of this, Rs 21,000 crore is given for domestically produced urea and Rs 15,545 crore for imported urea.
The subsidy provision for non-urea complexes is estimated at Rs 29,427 crore for the current fiscal.