Page 2 - Urea Subsidy

Cabinet likely to discuss change in urea subsidy

The Union Cabinet is expected to consider a change in the New Urea Policy of 2015, to enable disbursal of higher subsidy to companies which perform better, based on the import parity price (IPP). A panel of ministers at a meeting scheduled for Friday is also expected to approve unrestricted export of all certified organic agricultural products.On urea, officials said the import parity price is calculated on the basis of the landed price. Incidentals like customs and port loading and handling charges are not included. This sometimes leads to less disbursal of subsidy to fertiliser companies, when the landed price falls sharply in international markets. This is because the subsidy is capped up to the IPP.If customs duty and port handling charges, estimated to be 5.65 per cent, are added to the landed price on any day for the purpose of subsidy calculation, it will lead to higher outgo for companies. The subsidy for urea is calculated on the basis of variable cost (mainly gas prices), ...