Chemicals and fertiliser minister Ram Vilas Paswan may manage to get only the Barauni unit of Hindustan Fertilisers Corporation Ltd (HFCL) revived through Central budgetary resources with the finance ministry pouring cold water over his ministry’s proposal to turn around all the units of HFCL and Fertiliser Corporation of India (FCI) through government funds.

Interestingly, the Barauni unit, shut down on January 1, 1999, is the only unit in Paswan’s home state Bihar. Retaining its public sector character and generating employment by pumping Central funds into the unit will give the minister great political mileage ahead of general elections. In late 1970s and 1980s, the unit employed over 2,500 people. Though it had a capacity of three lakh metric tonnes, the utilisation never crossed 30-40 per cent.

The finance ministry has recommended that the department of fertilisers must try and revive the other five units of HFCL and FCI — Talcher, Ramagundam, Gorakhpur, Durgapur and Sindri — by roping in the private sector. It has pointed to the constraints arising out of the government’s commitment to the Fiscal Responsibility and Budget Management Act, in expressing its inability to spare funds for reviving all the units. The department of fertiliser had demanded that loans and interest of Rs 24,168 crore be written off besides extending additional budgetary support of Rs 7,200 crore for facilitating the revival of the six units of the two state-owned fertiliser companies.

Experts, however, doubt if the private sector would be interested at all, given the mess that the fertiliser industry is in today. The intent of the government to reduce and gradually eliminate fertiliser subsidies can never be achieved since the state had no control over the factors — input costs and sale price of fertilisers — that influence the quantum of subsidies.

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