Indian govt nods extension urea subsidy till 2020

Indian govt nod for extension of urea subsidy till 2020

9:17 AM, 20th March 2018
Chemical fertilizers have played an important role in the growth of Indian agriculture. (File photo)
Chemical fertilizers have played an important role in the growth of Indian agriculture. (File photo)

NEW DELHI, INDIA: The Cabinet Committee on Economic Affairs has approved the proposal of Department of Fertilizers to continue urea subsidy scheme up to 2019-20 at a total estimated cost of Rs. 1,64,935 crores and for disbursement of fertilizer subsidy.

This decision implies that there will be no increase in the price of urea, till 2020.

The continuation of urea subsidy scheme will ensure the timely payment of subsidy to the urea manufacturers resulting in the timely availability of urea to farmers. Urea subsidy also includes imported urea subsidy which is directed towards import to bridge the gap between assessed demand and indigenous production of urea in the country. It also includes freight subsidy for movement of urea across the country.

This is in continuation of farmer-friendly policies of the Central Government. Earlier, 100 percent neem coated urea was made mandatory in 2015. A study conducted by the Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW) had found the effects of neem coating of urea as follows:

  • Improvement in soil health.
  • Reduction in costs with respect to plant protection chemicals.
  • Reduction in pest and disease attack.
  • An increase in yield of paddy to an extent of 5.79 percent.
  • An increase in yield of sugarcane to extent of 17.5 percent.
  • An increase in yield of maize to the extent of 7.14 percent.
  • An increase in yield of soybean to the extent of 7.4 percent.
  • An increase in yield of tur/red gram to the extent of 16.88 percent.

Neem coating also had an additional positive impact – plugging the diversion of the subsidized urea towards non-agricultural purposes. In light of the increased efficiency of urea due to neem coating, government had recently decided to bag urea in 45kg bags. this will effectively help reduce the cost of fertilizers to the farmers.

Government had earlier notified new urea policy, 2015, with the objectives of maximizing indigenous urea production; promoting energy efficiency in urea production; and rationalizing subsidy burden on the government. This led to the highest ever production of 245 LMT during 2015-16. In effect, 20 LMT of Urea during the same period was additionally produced without adding any additional capacity.

These steps have ensured continued easy availability of urea to the farmers at an affordable price. This decision reiterates the commitment of the present government towards the welfare of the farmers.

Chemical fertilizers have played an important role in making the country self-reliant in food grain production and provide a very vital input for the growth of Indian agriculture. At present, there are 31 urea manufacturing units, out of which 28 urea units use natural gas (using domestic gas/LNG/CBM) as feedstock/ fuel and remaining 3 urea units use naphtha as feedstock/fuel.

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