India Development News & Foreign Investment Opportunities

Five fertilizer plants being revived

Structural reforms undertaken

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Structural reforms undertaken

Matix Group

 

The Government is reviving five closed fertilizer plants — Talcher, Ramagundam, Gorakhpur and Sindri plants of FCIL and Barauni plant of HFCL by setting up new Ammonia Urea plants of 12.7 Lakh metric tonne per annum capacity.

These projects upon implementation and operationalization will help rejuvenate the fertilizer sector, said Chemicals and Fertilizers Minister D.V. Sadananda Gowda in written reply to Rajya Sabha on 29 Nov 2019.

He also listed out deep-rooted structural reforms undertaken by the Department of Fertilizers in last 5 years.

These are:

Based on Cabinet Committee on Economic Affairs’ decision, vide notification dated 25 May 2015 Department of Fertilizers had made it mandatory for all the domestic producers of urea to produce 100% as Neem Coated Urea, with the objective of promoting the balanced use of fertilizers. Entire quantity of indigenously produced urea and imported urea is being neem coated from 1 September 2015 1 December 2015.

Based on CCEA decision, vide notification dated 4th September 2017, the Government of India has introduced 45 kg bag of urea in place of 50 kg bag of urea in order to reduce the consumption of urea.

The Department of fertilizers has also implemented Direct Benefit Transfer (DBT) System across all States/UTs with effect from March 2018. Under the DBT system, 100% subsidy on various fertilizer grades is released to the fertilizer companies, on the basis of actual sales made by the retailers to the beneficiaries through Point of Sale (PoS) devices installed at each retailer shop and the beneficiaries are identified through Aadhaar Card, Kisan Credit Card, Voter Identity Card etc.

As far as market-linked pricing policy is concerned, the Maximum Retail Price (MRP) of urea is statutorily fixed by the Government. The MRP of 45 kg bag of urea is Rs.242 per bag (exclusive of charges towards neem coating and taxes as applicable) and the MRP of 50 kg bag of urea is Rs.268 per bag (exclusive of charges towards neem coating and taxes as applicable).

The Nutrient Based Subsidy (NBS) Scheme for Phosphatic & Potassic fertilizers has already been implemented from 1 April 2010. Under the said Scheme, a fixed amount of subsidy decided on annual basis, is provided on each grade of subsidized Phosphatic & Potassic (P&K) fertilizers depending upon its Nutrient Content. As the P&K fertilizers are decontrolled, the MRP is fixed by Companies as per market dynamics at reasonable level.

The Government encourages private entrepreneurs of India and Foreign countries to invest in fertilizer manufacturing with an objective of increasing domestic production capacities in the country. The New Investment Policy (NIP) 2012 is especially designed for this purpose. Since the notification of NIP-2012, two urea plants have come up in private sector.

There is no proposal for setting up of new urea plant in West Bengal. However, Matix Fertilizers & Chemicals Limited has already set up a Coal Bed Methane (CBM) based Greenfield Ammonia–Urea complex at Panagarh, West Bengal under NIP-2012.

The commercial production of Matix started on 1 October 2017. Chambal Fertilizers & Chemicals Limited (CFCL) has also set up a Brownfield project at Gadepan, Rajasthan, commercial production of which started on 1 January 2019. fiinews.com

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