Urea output to rise to 223 lakh tonne in FY12: govt

Production of urea, a key fertiliser, is expected to increase by 4.2 lakh tonne to 223 lakh tonne this fiscal.

India produced 218.80 lakh tonne of urea in FY11, Minister of State for Chemicals and Fertilisers Srikant Jena informed the Rajya Sabha last week.

Consequently, imports of the essential crop nutrient are estimated to decline by 4.1 lakh tonne to 62 lakh tonne in FY12, compared to 66.10 lakh tonne last fiscal.

"In FY12, the projected demand and indigenous production of urea is 285 lakh tonne and 223 lakh tonne, respectively. The gap is met through imports," Jena said.

In order to boost urea output, the government has decided to revive the closed units of Fertiliser Corporation of India Ltd (FCIL) and Hindustan Fertiliser Corporation Ltd (HCIL).

The government has decided to revive the Sindri, Gorakhpur, Talcher and Ramagundam units of FCIL as well as the Barauni and Durgapur units of HCIL. All the units were shut down in 2002 by the government.

The Cabinet Committee on Economic Affairs (CCEA), in its meeting held on August 4, 2011, decided to revive the four units of FCIL and two of HCIL, Jena informed the House.

The minister added that the list also included two non-commissioned fertiliser units at Korba and Haldia, which were set up by FCIL and HFCL, respectively.

Urea is the only fertiliser subject to partial movement, distribution and statutory price controls. It is imported for direct use on the government account to bridge the demand-supply gap.

A proposal for a Nutrient-Based Subsidy (NBS) for urea is under the government's consideration.