Union Cabinet Approves New Urea Policy, To Reduce Annual Subsidy Bill By Over Rs.4,800 Cr

13 May, New Delhi

The Union Cabinet Wednesday approved a new urea policy aiming to increase domestic production by 2 million tonnes and reduce its subsidy bill by over Rs 4,800 crore annually.
The maximum retail price of urea for farmers has been left untouched at Rs 268 per bag of 50 kilograms, excluding local taxes. Farmers would have to pay an additional Rs 14 per bag for neem-coated urea.

The Cabinet has approved the comprehensive New Urea Policy 2015 for the next four fiscals in order to maximise indigenous urea production and promote 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.

The new policy is also expected to result in an additional production of around 20 lakh tonnes of urea annually.
India’s urea production has remained stagnant at 22 million tonnes annually and the country has to import about 8 million tonn to meet the domestic demand.
The policy will ensure timely supply of urea to farmers at the same retail price with lesser financial burden on the exchequer, besides reducing import dependence.