According to the Satish Chander, Director General, Fertilizer Association of India (FOI), “the DBT in short to medium-term will be a big challenge for the industry because under this the payment of subsidy is shifted to purchase by the farmers and they purchase only four months in a year.”
Chander stated that “Farmer buys the fertilizer only when his fields are ready and he can put them, he never buys and stocks them”.
Chander also added that, “Fertilizer sector is fully controlled by the government -higher sales, cost of production is determined by the Government of India (GoI).”
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Therefore the payment of the industry will shrink from 12 months to 4 months, once DBT is fully operational. This could have a direct bearing on Urea Policy where the cost of production and interest cost will go up, he said. All these issues have been brought to the notice of the government, said Chander.
Tiwari said that, DBT could create a level playing field. It is a step in right direction.
Chander stated there is nothing which has changed in the industry for the stock prices to rally. GST and DBT are in fact difficult condition, which can adversely affect the companies in the short to medium term.
