CCEA nod for extension of urea subsidy till 2020

The government today approved a proposal to extend urea subsidy till 2020 and also implementation of direct benefit transfer (DBT) for disbursement of fertiliser subsidy.

Urea is made available to farmers at a statutorily controlled price of Rs 5,360 per tonne. The difference between the delivered cost of the fertiliser at farm gate and MRP is given as subsidy to manufacturers.

Urea subsidy is projected to be Rs 45,000 crore for the 2018-19 fiscal, as against Rs 42,748 crore for this year.

"The continuation of the urea subsidy scheme will ensure adequate quantity of urea is made available to the farmers at statutory controlled price," an official release said after the meeting of Cabinet Committee on Economic Affairs (CCEA).

The urea subsidy has been extended for three years till 2020 at a total estimated cost of Rs 1,64,935 crore, it added.

Normally, the Fertiliser Ministry takes approval for the urea subsidy subsidy on an yearly basis, but this time has received clearance for three years.

The CCEA has also approved implementation of direct benefit transfer (DBT) for disbursement of fertiliser subsidy in order to reduce diversion and plug the leakages.

In the statement, the government said it is in the process to roll out DBT in fertiliser sector nationwide. DBT would entail 100 per cent payment to fertiliser companies.

Therefore, continuation of the Urea Subsidy Scheme will facilitate the smooth implementation of DBT scheme in fertiliser sector, it added.