on the ad hoc price concession payment on di-ammonium phosphate (DAP) alone. The money locked up due to lapses in the payment of subsidy on other fertilisers is estimated at a further Rs 1,000 crore.
No industry can be expected to cope with such a situation indefinitely. However, there appears to be little escape just now as the government is unlikely to release funds of such magnitude just before the elections. In fact, arrears accumulation of this magnitude was caused to some degree by the political uncertainties preceding the dissolution of the Lok Sabha, as the government could not take a decision either on the new farmgate prices of concessional phosphatic and potassic fertilisers or on whether to persist with the denial of subsidy payment to urea units with high retention prices because of their achieving capacity utilisation above 115 per cent. The indecision on both counts has cost the industry dearly. The uptrend in the indigenous production of nitrogenous as well as phosphatic fertilisers, witnessed in the first half of the current fiscal, will consequently get reversed in the second.
The net result of all this is that the dreadful imbalance in nutrient use, caused by the 1992 decontrol move, persists with all its ominous portents. The ratio of the use of nitrogen (N), phosphorous (P) and potash (K) has still not reverted to the pre-decontrol level of 6:2.5:1, let alone the ideal figure of 4:2:1. In fact, the imbalance has of late deteriorated to nearly 10:3:1, compared to 8.5:2.5:1 a year ago.
While persistent skewed nutrient consumption is bad for soil health, the fiscal disabilities faced by the fertiliser manufacturers are detrimental to the health of the industry. Fresh investment has virtually dried up in this sector. Many of the existing fertiliser producers who were considering expansion of their capacities have abandoned their plans. While long-term reforms in the fertiliser sector can and, perhaps, should be left to the next government, the present dispensation need not be a mute spectator to this disquieting scenario.