New Delhi: Observing the widening demand-supply gap of urea in the country, a Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee on Friday gave green signal to a new investment policy for the urea sector.

Witnessing a decline in investments in the fertiliser sector since 1995, the government in 2008 had announced a new investment policy for the sector but it failed to attract fresh investments.  

Subsequently, the government in 2010 set up a committee headed by Planning Commission member Soumitra Choudhary to frame a new policy.

The GoM approved the recommendations of the committee but suggested reformations on few points. The policies will be framed accordingly in order to boost the urea production and lessen the demand-supply gap in the sector, sources said.

At present, the country faces scarcity of 70 lakh tonnes of urea the demand of which is met through imports. Domestic urea production is estimated at 2.20 crore tonnes, while the consumption is 2.90 crore tonnes.