Fertiliser companies hit by policy paralysis, subsidy pay delays

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SummaryChange of guard involving two ministers and three secretaries, and policy paralysis scrubbed away the promise urea investment policy held out for the year that had the potential to transform subsidy and inefficiency ridden fertiliser sector.

not gain momentum.

Rather there was a doubt over the efficacy of decontrol of P&K fertilisers done in April, 2010, for bringing in competition among manufacturers and ensuring reasonable retail prices.

Much of the policy inertia was seen during the tenure of DMK leader M K Alagiri, who later resigned after his party withdrew support from the UPA government. However, after taking over of the portfolio by Congress leader Srikant Jena, the situation started showing signs of improvement.

Even the change of three secretaries in a single year did not move things forward.

Nonetheless, the major attraction of the year was the hot battle between Deepak Fertilisers and Zuari Chemicals for takeover of Vijay Mallya-owned UB group's Manglore Chemicals and Fertilisers Ltd (MCFL), though neither of them could strike any deal during the year.

Going forward, Tata Chemicals Managing Director R Mukundan hoped the policy regime for fertiliser business would improve in 2014 with implementation of nutrient based scheme (NBS) for urea and timely payment of subsidy bills.

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