Further, improvement in gas availability should lead to reasonable gas prices, thereby leading to lower urea realisations and correspondingly, lower subsidy. X Close. New Investment Policy for Urea.
Receive urea investment policy global plant engineering projects — tailored to your needs and customizable at any polidy. The government is just one step away from finalising a new policy for attracting investments in the urea sector, according to two senior government officials familiar with the development, who declined to be identified. It will now be sent for approval urea investment policy a group of ministers GoM looking into the investmebt. In the draft policy, the government has worked out a fresh formula for providing incentives under three broad categories—greenfield, or new plants; brownfield expansion of existing plants; and for improving plant efficiency to boost output. The floor price is the minimum cost of production of urea the government will consider while fixing the subsidy.
ICRA Research has come out with its report on new urea investment policy 2012.
The Cabinet Commitee on Economic Affairs CCEA is expected to approve a new urea investment policy tomorrow that is likely to incentivise fertiliser firms setting up new plants and expanding existing capacity. Also read: Expect nod for new investment policy; hike urea prices: RCF. In , the government had announced a ‘New Investment Policy’ to boost urea production, but the scheme failed to attract fresh investment in the sector. India faces shortage of 10 million tonnes of urea, which is met through imports. The fertiliser ministry expects the new urea investment policy would attract a fresh investment of about Rs 35, crore to increase domestic production by 8 million tonnes.
The Cabinet Commitee on Economic Affairs Urea investment policy is expected to approve a new urea investment policy tomorrow that is likely to incentivise fertiliser firms setting up new plants and expanding existing capacity. Also read: Expect nod for new investment policy; hike urea prices: RCF. Inthe government had announced a ‘New Investment Policy’ to boost urea production, but the scheme failed to attract fresh investment in the sector.
India faces shortage of 10 million tonnes of urea, which is met through imports. The fertiliser ministry expects the new urea investment policy would attract a fresh investment of about Rs 35, crore to increase domestic production by 8 million tonnes. In the proposed new investment policy, the Ministry has recommended giving per cent post-tax return on fresh capital infused by the manufacturers for setting up of new plants, expansion urea investment policy revamp of existing ones.
To ensure this return, the ministry has decided to cover the entire cost of the natural gas, which is main feedstock of urea and accounts 80 per cent of the cost. At present, the government controls the urea sector and has fixed maximum retail price MRP at Rs 5, per tonne. The difference between the MRP and cost of production is given as subsidy to manufacturers.
For determing the cost of production of new plants to be set up after the policy comes into effect, the ministry has set a floor and ceiling price of urea based on the price of natural gas plus per cent equity returns. However, sources said the ministry has made some changes in the CCEA note after inter-ministerial consultation. The ministry has proposed covering entire cost of natural gas, while the GoM had favoured providing subsidy on gas price within the range of USD 6. The country produces 22 million tonnes of urea, against the requirement of 32 million tonnes.
Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express writtern permission of moneycontrol. Also read: Expect nod for new investment policy; hike urea prices: RCF Inthe government had announced a ‘New Investment Policy’ to boost urea production, but the scheme failed to attract fresh investment in the sector. Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs for first year.
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The fertilizer Industry has responded positively towards the New Investment Policy by initiating investment decision for revamp of existing capacities. Read More. The pricing structure leads to an implicit pass-through of gas prices while providing reasonable returns to the investors. Increase in domestic capacities is expected to lead urea investment policy decline in import dependence of urea, which should lead to moderation of global urea prices. Wait for it… Log in to our website to save your bookmarks. To read the full report click on the attachment Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs for first year. This has led to increase in the subsidy burden on the Government of India GoI. Forbes Celebrity list: Salman Khan drops to number 3, find out who takes top spot. The units would be supplied natural gas as and when they are ready to utilize the gas.
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