10% Urea Price Hike To Fund Subsidy On Other Fertilisers

The government proposes to increase concessions on the prices of phosphatic and potassic fertilisers by about Rs 1,000 per tonne by raising resources through a 10 per cent hike in the price of urea.

The move is aimed at ensuring balanced use of fertilisers without any additional subsidy burden on the exchequer. The new prices will be effective from the day the decision is announced in Parliament.

The proposed 10 per cent hike in urea price is expected to result in subsidy saving of Rs 715 crore. This amount is proposed to be passed on to the farmers in the form of increased concessions on phosphatic and potassic fertilisers.

 

According to a decision taken by the Cabinet Committee on Economic Affairs on Monday, the concession on indigenous diammoniam phosphate (DAP) will go up by Rs 1,000 per tonne to Rs 4,000 per tonne and on imported DAP by Rs 500 per tonne to Rs 1,500 per tonne.

In the case of muriate of potash, it will go up by Rs 500 per tonne to Rs 1,500 per tonne and for SSP by Rs 100 per tonne to Rs 500 per tonne. In the case of complexes, the concession is proposed to go up from Rs 1,304-Rs 2,633 per tonne to Rs 1,730-Rs 3,510 per tonne.

The CCEA has decided to allow 80 per cent of non-urea subsidy amount to be paid upfront to the manufacturing units based on despatch records.

The rest will be paid after verifying the certificates received from various states.

The government also plans to canalise 25 per cent of imported potassic and phosphatic fertilisers through the central cooperatives. An empowered committee will be set up to resolve disputes over consumer pricing of non-urea fertilisers. Later, a single price is expected to be imposed for all states.

Meanwhile, the cabinet deferred a decision on reviewing the pricing system for controlled fertilisers till the Hanumantha Rao committee submits its report. The committee is expected to submit its report within six months.