The state government has approved a proposal of Agriculture and Food Production Department for creation of Rs 100 crore corpus fund for timely payment to fertilizer companies by state-run corporations such as Markfed and Odisha Agro Industries Corporation (OAIC).
The state planning and cooperation department has allowed the Directorate of Agriculture and Food Production to go ahead with the proposal.
As per the decision, the state government will deposit the money in an escrow account opened with Orissa State Cooperative Bank on behalf of the corporations such and Markfed and OAIC.
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"This will be an one time deposit. We will spend the amount every year for buying fertilizer," said Aswini Kumar Dhal, general manager (finance) with Markfed.
The state government will deposit Rs 75 crore on behalf of Markfed and Rs 25 crore for OAIC.
"The fund will be released to the fertilizer suppliers directly on submission of sale bills, duly certified by the corporations as acknowledgement of the consignment of fertilisers. The sale proceeds will be directly deposited in the escrow account in shape of D.D./Bankers cheque which would check misutilization of the fund," as per guidelines adopted in a high level meeting chaired by Finance Secretary earlier this year.
Earlier, a Rs 200 crore corpus fund was proposed to be created, but later it was scaled down to Rs 100 crore, based on profit and loss account of the corporation.
The Agriculture and Food Production department said that the funds will pave way for making profit by the corporations as they will get discounts by making timely payments to the companies. Also, they need not borrow from banks to pay the fertilizer bills and will get rid of interest payments.
The finance secretary has instructed that the surplus profit will be transferred to the corporations, which will be utilised for fertiliser business only under the supervision of Directorate of Agriculture and Food Production. It has also been decided that the accounts will be replenished on 1 December and 1 June every year.
