A group of ministers (GoM) headed by agriculture minister Sharad Pawar has formed a committee to look into issues involved in the formulation of a new policy to attract investments into the fertiliser sector. The new panel, comprising secretaries of expenditure, fertilisers and agriculture & cooperation, will be headed by Planning Commission member (agriculture) Abhijit Sen. It is expected to submit its recommendations to the GoM within the next two months. Government sources told FE, "The committee's formation has taken place at a time when the finance ministry has rejected the demand by the department of fertilisers (DoF) for an exemption on customs duty on imported goods, and an exemption on excise duty for greenfield/ brown field/ expansion/ revamp projects. The committee's formation is also important in view of the fact that the fertiliser sector has not attracted any major investment for about a decade, while other industrial sectors are flooded with funds, including FDI. Recent policies with excessive regulations and controls have stifled the industry.' Industry sources emphasised the need for a new investment policy, as it has been sandwitched between rising prices of inputs and relatively insignificant increases in minimum retail prices of fertilisers. The industry has observed that a rise in subsidy, which is estimated to be a record Rs 70,000 crore for 2008-09, is not due to inefficiency but short-term government policies. The industry has sought sops for hassle-free investments in the sector. According to sources, the industry must be allowed to recover its cost with reasonable margins. Sources said the new investment policy should be a part of the overall economic policy, particularly agriculture policy, and it should not be finalised in isolation. Sources said the new policy to attract investment was the need of the hour, as by the end of the 11th Plan, the gap between consumption and domestic production will widen to 16 million tones, excluding an import requirement of raw materials and intermediates.