The proposal was dropped from the agenda list for CCEA meeting at the last minute after the Planning Commission sought more time to examine the changes proposed by the Fertiliser Ministry in the urea policy, sources said.
Hence, Fertiliser Minister Srikant Jena did not attend the CCEA meeting, they added
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In the cabinet note, the Ministry proposed amending the policy by dropping the clause related to 'guaranteed buyback' and suggested a bidding process to select companies that are keen to invest in brownfield and greenfield projects.
Notified earlier this year, the policy aims at encouraging investments in the sector so as to boost domestic production and curb imports. One of the incentives provided in the policy is assured buyback of urea by the government for eight years from the start of production.
On account of this incentive, the government received 13 investment proposals envisaging capacity addition of 16 million tonnes, double the actual requirement. Urea production in the country is stagnant at 22 million tonnes and the gap of 8 million tonnes is met through imports. So far, about 4 million tonnes of urea has been imported.
Government controls urea sector by fixing MRP at Rs 5,360 per tonne. Difference between MRP and production cost is reimbursed as subsidy to fertiliser companies.