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Formulation
of policy parameters for the 7th and 8th
pricing periods under RPS:
Under RPS, urea units are compensated
for the difference between the statutorily notified
sale price and the cost of production as assessed by
the Government together with a reasonable return on
net-worth, called the retention price. The retention price is fixed unit-wise based
on parameters approved for a three year pricing period
subject to escalation/de-escalation of cost of inputs
during the currency of the pricing period. The 6th
Pricing Period was valid up to 30.6.1997.
The policy parameters for the period
beyond 1.7.1997 - the 7th and 8th
pricing periods - have been finalised with the approval
of Cabinet Committee on Economic Affairs (CCEA) in its
meeting held on 16.5.2002, which has also been communicated
to all urea units on 4.6.2002. The 7th Pricing
Period will cover the period from 1.7.1997 to 31.3.2000
and the 8th Pricing Period, from 1.4.2000
to 31.3.2003. These are largely in the nature of updating
the norms prevailing in the preceding pricing period.
However, significant changes have been made with regard
to reassessment of plant capacities, withdrawal of vintage
allowance, increase in normative levels of capacity
utilization and updating the consumption norms.
1. PRICING PERIOD
1.1 The duration of the 7th
and 8th pricing periods shall be as follows:
- 7th - from 1.7.1997 to 31.3.2000.
- 8th - from 1.4.2000 to 31.3.2003 or till a
new pricing policy is announced, whichever is earlier.
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2. COSTED
YEAR
2.1 Costed year for the 7th
and 8th pricing periods shall be as follows:
- 7th - 1.4.1997 to 31.3.1998.
- 8th - 1.4.1999 to 31.3.2000.
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3. PLANT CAPACITY
3.1 An interim revision of the
capacities of 16 units was notified by the Department,
effective from 1.4.2000. Based on the methodology of
Alagh Committee, the capacity of 20 manufacturing units
have been revised effective from 1.4.2000. Capacities
of the units as on 1.4.2000 are given in Annexure-I.
3.2 Department would, however,
keep a watch over the changes in the capacity of the
individual units in future and take action to notify
the revised capacity.
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