Govt to reform urea policy; price hike unlikely

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Government plans to bring changes in the urea policy to boost domestic production, but it is unlikely to increase the price of the soil nutrient, said the media report.

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.

"Without increasing urea prices, there will be far reaching reforms in the sector," a highly placed source told media when asked about whether there is plan to decontrol urea.

In urea policy reform, sources said, the ministry is considering measures for boosting urea production by making plants more energy efficient, pooling of gas supplied to the urea facilities and direct transfer of subsidy to farmers.

"In direct transfer of fertiliser subsidy, there are some challenges. For example, in many cases land owners are not the actual cultivators," a government official said.

The Centre is unlikely to free urea imports, which is currently done by only three canalising agencies, STC, MMTC and Indian Potash Ltd, the official added.

The Centre has started taking steps to boost domestic production of urea.

Story first published: Tuesday, January 20, 2015, 23:00 [IST]
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