Cabinet announces urea investment policy

New delhi, august 8 : The Union Cabinet today announced a new pricing policy for urea to enhance investment in the sector. The new urea investment policy was approved by the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Manmohan Singh.

Under the fresh norms, the international price-parity formula for the domestic urea manufacturers would be adopted for calculation of subsidy and cost of production. Import price parity (IPP) for the revamp of existing units would be recognised at 85 per cent in a price band of 250-425 dollar a tonne, while the same for expansion of capacity would be 90 per cent.

Urea from the revived units of HFCL and FCIL would be recognised at 95 per cent of IPP in the same price band, science and technology minister Kapil Sibal told reporters after the meeting.

Restructuring of PSB equity cleared

The Union Cabinet today approved equity capital restructuring of Punjab and Sind Bank, which will now allow it to raise fresh equity through the capital market by way of an initial public offering.

The restructuring will be done by converting Rs 160 crore into ‘innovative perpetual debt instrument’ and Rs 200 crore into ‘perpetual non-cumulative preference shares’ while retaining Rs 183.06 crore as the equity capital of the bank.

Considering its weak financial position, PSB will also be allowed to pay an annual floating coupon rate benchmarked to the repo rate without any spread for the first three years, that is, from 2008-09 to 2010-11.

The additional capital would enable the bank to expand its business in compliance with Basel II requirements (international risk norms), thereby improving its financial position, said Sibal.

Social security

The Cabinet also cleared a long-pending demand of Indians working abroad related to social security. In an agreement signed with Germany, it has been agreed upon by the German Government to exempt Indian nationals working there under a short-term contract of up to 48 months from contributing towards social security in that country. However, these workers will have to continue their contributions towards social security in India.

In a similar agreement with Netherlands, working or self-employed Indian nationals in Netherlands will be entitled to export of the social security benefit if they relocate to India. Indians working in Netherlands have been exempted from paying social security in the host nation for up to 5 years, as long as social security contribution is made in the home country.

FCRA deferred

The Cabinet deferred the proposal for...

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