Fertilizers: New pricing policy must boost domestic investment

摘要

The fertilizer industry in India - especially the urea manufactur-ing units - continues to grapple with the fiscal challenges posed by the reluctance of the government to permit them to increase prices to compensate for the increase in cost of feedstock. The difference between the cost of manufacturing and the price of finished fertilizers is handled out as subsidy by the government, and this figure has steadily increased due to the unabated rise in the cost of petroleum-based fuels and natural gas. This has, not surprisingly, se-verely strained the cash flows of fertilizer producers; urea manufacturers, for example, have been forced to short-term loans in order to manage liquidity over and above the sanctioned working capital limits.