Decontrolled fertilizers...Govt hikes subsidy for RCF

Due to the revision of rates, there is an estimated financial implication of Rs.15.95 crore for the Government.

Feb 11, 2010 12:02 IST India Infoline News Service

The Cabinet Committee on Economic Affairs today approved revised rates of concession applicable for the period 1st July 2005 to 31st March 2008 for two grades of complex fertilizers namely grade 15-15-15 and 20-20-0 produced and sold by Rashtriya Chemicals and Fertilizers (RCF) Ltd, a Public Sector Undertaking under the Department of Fertilizers, Government of India.


Due to the revision of rates, there is an estimated financial implication of Rs.15.95 crore for the Government.


The revision is a one-time dispensation and will be implemented retrospectively applicable for the period 1st July 2005 to 31st March 2008.


Revision in the rates of concession would cover the under recovery incurred by RCF and would enable it to sustain its operation and make fertilizer available in the country.


Two grades of complex fertilizers, namely 20:20:0 and 15:15:15 produced and sold by RCF, which are produced with gas as feedstock for sourcing Nitrogen ‘N’, are under the concession scheme for P&K fertilizers. 


Concession for the two grades of complex fertilizers by RCF from 2003-04 up to 31st March 2008 were based on the price of gas under APM prevailing before July 2005.  With effect from 1st July, 2005, however, Government revised the price of gas under APM due to which cost of production by RCF went up.  Accordingly, Government has decided to revise the rates of compensation by recognizing the increase in the price of gas under APM w.e.f. 1st July 2005.

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