LOK SABHA
Government is in
the process of formulating a new pricing policy for urea units
keeping in view the recommendations of Expenditure Reforms Commission
for replacing the existing Retention Price Scheme. The proposed
new policy will be in the shape of Group Concession Scheme and
is proposed to be introduced w.e.f. 1.4.2003. The new policy will
aim at greater transparency, uniformity and efficiency in subsidy
disbursements to urea units and will induce urea manufacturers
to take cost reduction measures on their own and be competitive.
Improving the
efficiency of urea producing units with the objective of bringing
down the cost of production and controlling the subsidy outgo
is an ongoing exercise of the Government. Keeping that in mind,
policy parameters governing the determination of retention prices
of urea units were recently revised for the 7th and
8th pricing periods and which have been notified to
urea companies on 4.6.2002. The 7th Pricing period
will cover the period from 1.7.1997 to 31.3.2000, the 8th
Pricing Period will cover the period from 1.4.2000 to 31.3.2003
or till the new pricing policy comes into existence, whichever
is earlier. While finalising the policy parameters for the 7th
and 8th Pricing Periods, the parameters pertaining
to plant capacity, capacity utilization norm, consumption norms
have been updated and revised. Vintage allowance of 5 per cent
both in respect of capacity utilization and consumption norms,
which was allowed to urea units which have been in operation for
10 years or more, has also been withdrawn in phased manner during
the 7th pricing period and completely w.e.f. 1.4.2000.
Updation/revision of these norms has contributed towards bringing
down the cost of production of urea.
This information
was given by the Minister of Chemicals & fertilizers, Shri
Sukhdev Singh Dhindsa, in a written reply to a question in the
Lok Sabha today.
