Cabinet nod to urea subsidy beyond 12th Five Year Plan

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, on Wednesday gave its nod to the proposal of Department of Fertilizers to continue urea subsidy scheme till 2020.

The decision means that there will be no increase in price of urea till 2020.

Urea subsidy is a part of Central Sector Scheme of Department of Fertilizers and is wholly financed by the Central government through Budgetary support.

"The continuation of urea subsidy scheme will ensure the timely payment of subsidy to the urea manufacturers resulting in timely availability of urea to farmers," said an official statement, noting that the 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.

Urea is made available to farmers at statutorily controlled price, which at present is Rs 5,360 per metric tonne, exclusive of the central and state taxes and the neem coating charges.

The difference between the delivered cost of fertilizers at farm gate and the maximum retail price payable by the farmer is given as subsidy to the fertilizer manufacturer/importer by the government.

At present, there are 31 urea manufacturing units in the country.

--IANS

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