Panel for dual status to fertiliser coops

NEW DELHI, May 3: The working group on fertilisers for the Ninth Plan has suggested the dual status of `cooperative companies' for two mult...

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NEW DELHI, May 3: The working group on fertilisers for the Ninth Plan has suggested the dual status of `cooperative companies’ for two multi-state fertiliser cooperatives namely the Iffco and Kribhco, to facilitate raising funds from the capital market.

It has proposed suitable amendments in the Multi-State Cooperative Societies Act, 1984 and the Companies Act, 1956.

The group also favoured a specific time-bound sectoral divesture programme to be chalked out to accomplish this task.

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The panel favoured the disinvestment programme in these two societies as it felt that partial privatisation at the earliest would help them to raise required resources for modernisation, revamp, expansion and diversification.

In the same breath, it opined that public participation in ownership would also help in improving efficiency, management culture and accountability. It also noted that consequent to the pricing policy changes in August, 1992, the fertiliser industry had to pass through rough waters. The tardiness of the improvement in financial performance during the initial phase of stabilisation and adverse capital market conditions have constrained the buoyancy of fertiliser PSU shares.

The working group, however, noted that the two fertiliser cooperatives and the public sector companies like NFL, RCF, MFL and FACT has shown significant improvement in operational performance in terms of enhanced capacity utilisation and financial parameters in the Eighth Plan period. In terms of nitrogen production, the capacity utilisation of the cooperatives increased to 117.8 per cent in 1995-96 from 111.3 per cent in 1992-93, whilst the capacity utilisation of PSUs increased to 73.2 per cent and that of private sector rose to 116.4 per cent in 1995-96. Similarly, in terms of phosphate output, the capacity utilisation of cooperatives increased to 116.7 per cent in 1995-96 as against 99.7 per cent.