Direct benefit transfer for fertilisers a welcome step: RCF

The Rs 70,000 crore subsidy proposed in the Budget for the fertiser industry is sufficient for to cover this year as well as the outstanding amount from last year, says RG Rajan, CMD of RCF.In an interview with CNBC-TV18, he said that the direct benefit transfer trial for fertilisers announced in the Budget is a welcome step.Speaking on the company's new facility in Thal he said that approval from Cabinet Committee on Economic Affairs (CCEA) is pending and he hopes to get it in the next two months in order to start the project.Below is the transcript of RG Rajan’s interview with CNBC-TV18's Ekta Batra and Anuj Singhal. Ekta: First it is a subsidy figure of Rs 70,000 crore which is announced for this Budget for the fertiliser space. Is that enough for the fertiliser industry and secondly any more particular announcements that were positive for the fertiliser space? A: This Budget amount announced is sufficient for this year and maybe some outstanding from last year can also be paid and regarding the second question that in the Budget they announced direct benefit transfer for the fertilisers in a few districts of the country on a pilot scale. So, this is a welcome step definitely and also the focus on soil health cards and to give all the 14 crore farmers soil health cards is also very good step. Anuj: I was just looking at your financials. While yours stand out compared to rest of the fertiliser sector because you are profit making but this year hasn't been good compared to last year. What about next financial year? A: Next financial year should be better because initial forecasts are next year we will have better monsoon and if we have better monsoon, definitely we will have better results next year. Ekta: Your pre monsoon dispatches might have begun or must be in the early stages at this point. How are they looking? A: No, dispatches are going on but as I told a number of time earlier also in other interviews that this year has been a very bad year because of the drought in Maharashtra, Telangana, Andhra Pradesh and Karnataka. There are huge inventories in all the states and therefore the sales this year are not so good as compared to last year. Dispatches are going on but they will only pick up once you have a good pre-monsoon showers sometime in May, they will pick up in that period, end of April, May, June maybe they will pick up once the pre-monsoon showers start. Anuj: Can you give us some update on your new facility in Thal, what is the status there? A: We have got Public Investment Board (PIB) approval for the project and the last stage is now in the cabinet approval, Cabinet Committee on Economic Affairs (CCEA) approval. We hope that we get this approval in the next one or two months and then we will start the project. Ekta: How are you funding it and would you have any partners? A: It is totally funded by RCF. It is a 1.3 million tonne Urea plant costing around Rs 5,500 crore and 70 percent will be the debt and equity 30 percent. Equity of 30 percent will come from internal generation only.