ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Fertilisers : Policy Muddle

It is time once again for fresh policy convulsions in the fertiliser sector and for claims and counter-claims by the government and industry. After a break in 2000-01, the government has once again imported 2.2 lakh tonnes of urea in order, it says, to prevent a shortage in the current rabi season. Considering that the total installed capacity of urea in the country is 20.9 mn tonnes, the import of such a small quantity is probably a symbolic gesture to drive home the government’s determination to press ahead with ‘rationalisation’ of prices. In November, the government, in an ‘interim’ decision, notified lower retention prices of urea for 13 manufacturers with retrospective effect from April 2000. This is expected to result in savings of Rs 800 crore in subsidies given to fertiliser units. The government has also drawn up stiff new norms of capacity utilisation and feedstock consumption by fertiliser units based on which retention price will be determined. But a comprehensive long-term policy for the Rs 35,000 crore industry – a key element in the agriculture sector – has yet to materialise.

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