Centre okays new urea policy

The Centre on Wednesday approved new urea policy in which retail price will remain the same as current price for the next four years.

The Union Cabinet chaired by Prime Minister Narendra Modi approved the urea policy for the period of four years (2015 to 2019) and it aimed to increase the domestic production by 2 million tonnes and reduce its subsidy bill by over Rs 4,800 crore annually.

Briefing the media, Union Fertiliser Minister Ananth Kumar said for next four years (till 2019) maximum retail price of urea will remain the same at Rs 268 per bag of 50 kgs, excluding local taxes. For neem-coated urea farmers would have to pay an additional Rs 14 per bag.

Besides, the government also decided to continue the existing subsidy rates for Phosphatic and Potassic (P&K) fertilisers (22 grades including DAP, Single Super Phosphate (SSP), Muriate of Potash (MOP), etc.) under the Nutrient Based Subsidy (NBS) policy for the current year.

Subsidy rate for DAP remains same at Rs 12,350 per tonne while it is Rs 9,300 for MOP per tonne. Separate subsidy for boron and zinc coated fertilisers has also been continued. He said the Cabinet approved a comprehensive New Urea Policy 2015 with multiple objectives of maximising indigenous urea production and promoting energy efficiency in urea units to reduce the government’s subsidy burden.

“The policy will result in direct saving of subsidy of around Rs 2,618 crore and indirect saving of Rs 2,211 crore on account of revised specific energy consumption norms and import substitution, respectively, during the next four years. Total savings would be Rs 4,829 crore,” he said.

The new policy is also expected to result in an additional production of around 20 lakh tonnes of urea annually and will ensure timely supply of urea to farmers, he said.