The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has given its approval to the proposal of Department of Fertilizers to remove ambiguities in the Modified New Pricing Scheme -III (NPS-III) for determination of fixed costs for the urea units.
Modified NPS-III was notified on 2nd April, 2014. However, due to ambiguous language of the notification, it could not be implemented. The above decision will facilitate its smooth implementation which will result in grant of Additional Fixed Cost of Rs.350/MT to 30 urea manufacturing units. The implementation of the Modified NPS-III will result in gains to existing urea units to the extent of their actual increase in fixed cost with ceilings as mentioned in the proposal which will ensure that no unit is benefited unduly.
This will facilitate the continued operations of the urea units resulting in sustained and regular supply of urea to the farmers.
The approval will also grant the special compensation of Rs. 150/MT to urea units which are more than 30 years old and converted to gas which will incentivize these units to remain viable for sustained production.
The measures will ensure maximum domestic production of urea and reduce will reduce import dependency.