Published on December 2, 2013

The use of fertilizers in the industry has been there since a long time now; it has become one of the basic necessities for Crop Production. Since India is known to be on the agricultural side, the use of fertilizers is big. Thus, to help farmers government has various subsidies and other special arrangements so that these products can be available to the common man at cheaper cost.

Keeping such things in mind, the department of fertilizer has planned to roll out special banking arrangements for all the categories and not only Urea as it was earlier. There has been a proposal for soft loans which will soon be finalized by the Ministry of Finance for a total of Rs. 10,000 to 12,000 crore and adding to that is the subsidy of Rs. 5500 crore which is already in place and distributed by the Ministry of fertilizer.

There already has been a huge gap in the finances as the fertilizer industry has already disbursed around Rs. 31,500 crore to the manufacturers for this year, and a payment of Rs. 34,000 crore stands on its head will cover the entire budget for the year 2014, in the first half only. With the financial issues on the head, the imports have increased too.

Urea imports have increased by 25% for the months of April-December, around 50 lakh tonnes due to the good rainfall that was witnessed this year. The financial issues from the government aside, the new policy for Urea is found unsustainable by the industry. The government has fixed the prices for Urea at Rs. 5360 per tonne. The difference is reimbursed by the government to the manufacturers.

There has been a problem of fertilizer smuggling and pilferage too around the nation and government has come up with steps to get the issue in check by announcing various measures.

Overall, the industry is good, one season for this year has passed and it has been good. The current outlook for this industry completely relies of the winter crops, which have predicted to be good.