Investments to set up 8 mt capacity lined up

pAfter the Cabinet Committee on Economic Affairs CCEA deferred a decision on the New Investment Policy for urea the fertiliser industry has said the new policy will be crucial in meeting a gap of domestic urea production and its demandppAddressing a press conference to announce the annual conference of the Fertiliser Association of India FAI last night association chairman and CMD of Rashtriya Chemicals and Fertlisers RCF RG Rajan said the urea policy is expected to be in place soon and investments to set up close to 8 million tonnes capacity are lined upppThe policy was approved by the Group of Ministers in February However the industry gave a cold response that time saying that the cap on gas price of 14 per mmbtu for urea plants was not making capacity expansion more attractive Rajan said that appropriate changes have been incorporated in the policy now The fertiliser ministry also expects the new urea investment policy to attract an investment of about Rs 35000 crore to increase domestic production by 8 million tonnesppIn 2008 also the government had announced a New Investment Policy to boost urea production but the scheme failed to attract fresh investment in the sectorppIndia faces shortage of close to 10 million tonnes of urea which is met through imports Of the total urea consumption of over 30 million tonnes in the country 22 million tonnes is domestically produced while the rest is imported In the proposed new investment policy the ministry has recommended giving 12-20 per cent post-tax return on fresh capital infused by the manufacturers for setting up of new plants expansion and revamp of existing onesp