The Cabinet Committee on Economic Affairs (CCEA) Thursday cleared a proposal to extend additional subsidy to state-owned Fertilisers and Chemicals of Travancore (FACT) till June 2013 to cover higher cost of naptha-based complex fertiliser.
New Delhi: The Cabinet Committee on Economic Affairs (CCEA) Thursday cleared a proposal to extend additional subsidy to state-owned Fertilisers and Chemicals of Travancore (FACT) till June 2013 to cover higher cost of naptha-based complex fertiliser.
"The CCEA has given extension to FACT till June 2013. Whereas Madras Fertiliser (MFL) and the Gujarat Narmada Valley Fertilizers and Chemicals (GNVFC) have been asked to submit a report to the Committee of Secretaries," sources said.
Since last two years, the government has been giving additional subsidy to naptha-based complex fertiliser makers like FACT and MFL to cover higher cost of production with a condition that they will convert their units into gas-based.
The FACT is expected to complete conversion of its units into gas-based by May, next year. Hence, the CCEA cleared the additional subsidy till June, sources said.
Normally, government gives an additional subsidy of Rs 300 crore to FACT and Rs 200 crore each to MFL and GNVFC.
With regard to MFL and GNVFC, sources said, "They have been asked to submit a report with clear deadline for conversion of their units from naptha to natural gas. Thereafter, the government will take a call subsidy."
FACT manufactures urea and complex fertilisers and is one of the largest fertilisers and chemicals makers in Kerala.
It also produces petrochemicals and provides engineering solutions for establishing petrochemicals, pharmaceuticals, refining plants.
For the current fiscal, the government's budget estimate of subsidy on complex fertilisers is Rs 28,576 crore. The total requirement of complex fertiliser for this year is estimated to be 11.25 million tonnes.