Cost-benefit Rationalisation To Guide New Urea Policy

New Delhi, February 27: | Updated: Feb 28 2003, 05:30am hrs
The Economic Survey has suggested that urea units gradually move in the direction of parity with international prices based on use of the most efficeient feedstock and latest technology, which will be put in place with the introduction of the new urea policy beginning April 1.

According to the Survey, the retention price scheme for the fertiliser sector aimed at providing fertilisers to farmers at affordable prices as also to ensure adequate return on investment to the units is out of tune with economic reality.

Given the current emphasis on global competitiveness and marketing, import openingup and price parity and free trade, urea units should adopt measures purely on the basis of a cost-benefit analysis, says the Survey.

The new urea pricing, based on the Expenditure Reforms Commission report, and is to be implemented from from April 1, should aim at reducing the hidden subsidy which stands at whopping Rs 7,004 crore as per current Budget estimates.