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New Delhi: The fertiliser ministry has sought the entire subsidy amount for 2009-10 be paid in cash only, and said the industry may not accept bonds as the securities provided in the last fiscal are yet to be redeemed.
In a pre-Budget memorandum, the ministry has submitted to the finance ministry that the industry may not accept bonds this fiscal.
“We have said whatever is the subsidy, we should continue to get the money. And, we don’t want bonds; we want cash. The industry is not in a position to accept any further bonds, as last year’s bonds are still to be redeemed,” fertiliser secretary Atul Chaturvedi said.
He, however, did not elaborate on the value of bonds that are yet to be redeemed. Nevertheless, the ministry’s latest position seems to be in sync with the demand of the fertiliser industry that has persistently maintained that the securities are mostly trading in discount, affecting the balance sheet of companies.
Even in its memorandum to the department of fertilisers in the run-up to the Budget, the industry has not only asked for the subsidy in cash but also demanded that the companies be compensated for losses incurred on the sale of securities.
The government controls the pricing of key fertilisers and offers funds to companies, called fertiliser subsidy, to compensate them for selling key farm nutrients at the rates determined by it. Earlier, the government had issued long-term bonds worth Rs 4,000 crore on December 24, 2008, and those worth Rs 10,000 crore and Rs 6,000 crore on December 10, 2008, and January 29 this year, respectively, to fertiliser firms to help meet their working capital requirements.
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