Fertiliser Ministry moves Cabinet note on urea policy

In the proposed new urea policy, the ministry is considering measures for boosting urea production by making plants more energy efficient

The Fertiliser Ministry has moved a Cabinet note on formulating a new urea policy that aims at higher domestic production of the soil nutrient and balanced use of fertilisers.

"There were various issues related to fertiliser sector including new urea policy which were discussed by the informal group of ministers headed by Rajnath Singh earlier this week.

Now these issues will be taken up by the Cabinet and a note in this regard has already been moved," a source said.

In the proposed new urea policy, the source said, the ministry is considering measures for boosting urea production by making plants more energy efficient.

Fertiliser Minister Ananth Kumar had already said that the government was committed to bringing reforms in the sector without raising urea prices.

The proposed policy will also provide framework for balanced use of fertilisers. The correct proportion in which Nitrogen (N), Phosphorus (P), and Potassium (K) should be used is 4:2:1, sources said.

Due to highly subsidised price of urea, the main provider of nitrogen is cheap while the other two elements are expensive. As a consequence, fertilizsr use in India is taking place in the ratio 8.2:3.2:1, sources added.

The Centre has already taken steps to boost domestic production of urea, by forming joint ventures for revival of two closed fertiliser plants at Talcher and Ramamgundam, while Cabinet approval has been given for revival of two other plants.

The Centre has also made some changes in the urea investment policy, under which it will permit setting up of new plants.

Urea, which is under government's control, is being sold at a highly subsidised rate of Rs 5,360 per tonne. The difference between the maximum retail price (MRP) and the cost of production is reimbursed to manufacturers as subsidy by the central government.

At present, the country imports about 8 million tonnes of urea to meet the annual domestic demand of 30 million tonnes. India produces about 22 million tonnes of urea annually.