NFL privatisation hits roadblock

NEW DELHI: Differences over framing the new fertiliser policy may delay the disinvestment of National Fertiliser.
Minister of state for shipping Ved Prakash Goyal — a member of the group of ministers working on the new policy — has opposed the policy proposed by the department of fertiliser (DoF).
The obvious result is a delay in the NFL divestment, which must wait for the GoM’s inputs before proceeding.Already, those inputs are three months behind schedule. And now, there is a distinct possibility of further delay.
Of course, fertiliser minister SS Dhindsa has already written to the Prime Minister seeking a deferment of the disinvestment.
Sources added that in GoM’s meeting on Monday, Goyal pushed for a relook at fertiliser policy. In an internal note circulated among the GoM, Goyal had pointed out that the pricing proposal by DoF would distort subsidy paid to fertiliser units, bring in irrationality and disturb the present equilibrium. Goyal also got support from agriculture minister Ajit Sigh, sources added.
Goyal proposed continuation with the present pricing policy for next three years till March 31, 2005.The GoM is represented by Planning Commission, disinvestment, finance, agriculture and shipping ministries. The latter is represented for its role in transporting fertilisers.
In his note, Goyal also said instead of fixing the price of urea, a method of fixing the rate of subsidy should be evolved, before switching over to decontrolled regime in three years. And a target of three years should be fixed for complete decontrol of urea production and distribution.
In the note, Gupta further criticised DoF’s approach to deal with price of gas and fuels, a critical factor in determining cost of urea at a later stage. According to him, this needs an immediate attention to define impact on manufacturing, costs and pricing of urea.