A group of ministers headed by Finance Minister Pranab Mukherjee has cleared the new investment policy for urea which is trying to reduce government’s subsidy burden. Now proposed policy is to be tabled for consideration and approval by the Union Cabinet.
Le us hope that it gets through as new urea policy would help enhance the dwindling production of urea in the country by up to 6-7 MT, which would be sufficient enough to meet India’s need for urea as a fertiliser.
The new urea investment policy is aimed at building fresh capacities in the country which has not seen any investment in urea since 1999. We expect heavy action in the fertiliser pack today that includes Chambal, RCF, and National Fertilizers, etc.
Will Urea Policy See Light of Day?
Only God knows answer to above question as the move to bear entire cost of gas till USD 14 per mmbtu will not be widely accepted as in the recent past the industry has been strongly advocating for the price to be at USD 20 mmbtu in order to make the investments viable.
Verdict
Fertiliser stocks will see short term rally.
Let us hope that good sense prevails ad we get to see reduced fiscal deficit else we will get into a debt trap. Bookmark us for best share tips and make money with our hot share of the day.
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