"Fresh investments in the post-liberalisation era have in fact been lower than what the industry received during the 1960s and despite reforms there is no foreign direct investment in this sector today," said Pratap Narayan, director general of the Fertiliser Association of India (FAI).

The climate today was not conducive for fresh investments and the uncertainity was hurting the industry, Narayan told newsmen here on Monday at a press conference.

"The turmoil and turbulence in the sector continues even as a stable, long-term and conducive policy continues to evade this vital sector of the economy having a strong bearing on its food security," he said.

Feed stock availability constraints, falling value of rupee, inadequate concessions, excessive government control, rising costs ofraw materials and lack of long-term policy were some of the main issues, acting as bottlenecks for the growth of the industry, FAI chairman VN Rai said.

Narayan said the fertiliser scene was buoyant during 1997-98, but things turned for worse during April-September 1998 with the phosphatic and potassic segment in particular suffering major setbacks.

The recommendations of the high powered Hanumantha Rao Committee did not bring much hope to the urea segment and implementation of the policy package would seriously affect the health and growth of the industry, he said.

Referring to the frequent changes made by the policy makers in the scheme of ad hoc concession for decontrolled phosphatic and potassic fertilisers, Narayan said "these changes were not justified".

"The decision to reduce concession rates for phosphatic fertilisers appeared to have been taken unilaterally by agriculture ministry purely on extraneous and artificial considerations, bypassing the consensus view of an empowered committee andignoring views of the fertiliser ministry and FAI," he said.

Unfavourable turn of policies and their implementation adversely affected the consumption prospects, he said adding sale of di-ammonium phosphate (DAP) fertiliser decreased from 2.88 million tonnes during April-September 1997 to 2.78 million tonnes during the same period in 1998.

The FAI director general said the industry was facing serious liquidity problems as over Rs 800 crore was locked up with the government in form of arrears for decontrolled fertilisers.

He said the decision of allowing manufacturers the freedom to fix selling prices of decontrolled fertilisers was reversed within just three weeks as the government decided to control the prices.

"The reversal would bring back the old era of state intervention and resultant distortions in the implementation of the scheme with consequential adverse effect on consumption of phosphatic and potassic fertilisers and imbalance in fertiliser use," Narayan said.

Referring to the withdrawalof the urea price increase, he said the potential benefit that would have accrued by way of saving in subsidy as well as in minimising the imbalance in N,P,K fertilisers use ratio, automatically disappeared by this single decision.

Narayan said import of urea plummeted from 1.69 million tonnes during April-September 1997 to only about 5,00,000 tonnes during April-September 1998.

The import of DAP also declined from about 1.5 million tonnes during April-September 1997 to about one million tonnes in the same period this year, he added.