The Hindu : Pricing norms for subsidies to urea units cleared

Online edition of India's National Newspaper
Friday, May 17, 2002

National

National

Pricing norms for subsidies to urea units cleared

By Our Special Correspondent

NEW DELHI MAY 16. Setting the stage for major reforms in the fertilizer sector, the Union Cabinet's Committee on Economic Affairs today gave its green signal for the much-awaited pricing norms for giving subsidies to urea units up to March next year.

Under the new norms, which would come into effect with retrospect from July 1997, the Government is expected to recover from the units a total of Rs. 1,833 crores, and, in the process, also give back to the industry Rs. 2,145 crores. In other words, the industry would get a net benefit of Rs. 312 crores.

Announcing the decision, the Secretary, Department of Fertilizers, Nripendra Mishra, said the recovery would be mainly on account of revision in the consumption norms and the phased withdrawal of allowances, based on the vintage of plants, while the outgo would be mainly due to changes with regard to capital addition, salaries and wages, and cost of utilities, insurance and selling expenses.

The new norms, he said, were based on the recommendations of the Group of Ministers, which was set up in March. It would now set the stage for the implementation of far-reaching reforms in the fertilizer sector in the background of recommendations made by the Expenditure Reforms Commission.

Send this article to Friends by E-Mail

National