Govt issues fertiliser bonds

The government on Wednesday issued bonds worth Rs 4000 crore to fertliser companies to compensate them for their losses. The 6.2% bonds which will mature in 2022 are being issued at par to 16 fertilizer companies as compensation towards fertilizer subsidy during the current financial year.

The investment in the special bonds by banks and insurance companies will not be reckoned as an eligible investment in government securities for their statutory requirements. However, such investment by the insurance companies will be eligible to be reckoned as investment under "other approved securities" category as defined under Insurance Regulatory and Development Authority (Investment) Regulations, 2000. Further, the investment by the provident funds, gratuity funds, superannuation funds. in the special bonds will be treated as an eligible investment. These special bonds will be transferable and eligible for market ready forward transactions (Repo).

The companies include Chamber Fertilisers, Gujarat Narmada Valley Fertilisers, Tata Chemicals, Coromondel Fertilisers Zuari Industries.