Big bonanza for UP farmers as Adityanath govt cuts urea prices by 10%

State exchequer to take a hit of Rs 1,000 crore in VAT kitty

The Uttar Pradesh government has cut urea prices by more than 10 per cent, in a major farm sector bonanza months ahead of the Lok Sabha polls.

A 45 kg bag of urea that sold at Rs 299 would now be available for Rs 266.50, while a 50 kg bag that earlier cost Rs 330.50 would be retailed to farmers at nearly Rs 299, a reduction of more than 10 per cent.

The new rates would be applicable from Saturday, a state government spokesperson said here late on Thursday, adding it was aimed at supplementing the wider roadmap of doubling the farmers’ income by 2022.

The urea prices in Uttar Pradesh were higher compared to other states owing to the policy of slapping additional value-added tax (VAT) on natural gas.

The farmers had for long been demanding bringing the prices at par with other states.

Earlier, there were three VAT slabs with the piped natural gas being taxed at 26 per cent, including a 5 per cent additional levy. Now, the VAT on natural gas has been rationalised from 21 per cent to 14.5 per cent and the additional VAT of 5 per cent waived off.

This VAT cut would impact the state exchequer by almost Rs 1,000 crore a year.