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Urea Subsidy Program
May 8 , 2018
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- The Cabinet Committee on Economic Affairs has approved the proposal of Department of Fertilizers to continue Urea Subsidy Scheme from 2017 upto 2020 and implementation of Direct Benefit Transfer (DBT) for disbursement of fertilizer subsidy. The proposal in these regards was forwarded by Department of Fertilizers, Ministry of Chemicals and Fertilizers.
- This decision implies that there will be no increase in price of urea, till 2020.
- The continuation of the urea subsidy scheme will ensure timely payment of subsidy to urea manufacturers resulting in timely availability of urea to farmers at statutory controlled price. Implementation of DBT in Fertilizer Sector will reduce diversion of fertilizers to non-agricultural use and plug leakages.
- Department of Fertilizers is in process to roll out DBT in fertilizer sector nationwide.
- DBT will entail 100% payment to fertilizer companies on sale of fertilizers to farmers at subsidized rates.
- The DBT in fertilizer sector being implemented is slightly different from normal DBT implemented for other schemes.
- Under it, the subsidy will be released to the fertilizer companies instead of the beneficiaries, after the sale is made by the retailers to the beneficiaries.
- Urea Subsidy is part of Central Sector Scheme (CSS) of Department and is wholly financed by Central Government of India through budgetary support. It also includes Imported Urea subsidy which is directed towards import to bridge gap between assessed demand and indigenous production of urea in the country. It also includes freight subsidy for movement of urea across the country.
- At present, there are 31 urea manufacturing units, out of which 28 urea units use Natural Gas as feedstock/fuel and remaining 3 urea units use Naphtha as feedstock
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