NEW DELHI: According to the reports, the Ministry of Fertilizers has requested the Finance Minister Arun Jaitley to release a sum more than Rs 25000 crore, to pay the urea manufacturers as Government subsidy.
Urea is being provided to the farmers at a fixed subsidized price of Rs 5360 per tonne. The difference between the cost of production of the Urea and its Maximum Retail Price(MRP) is paid by the Central Government as subsidy to the farmers.
As per the allocations in the Union Budget of the current financial year, the Government has allocated Rs 72,968.56 to the Fertilizer Ministry under Fertilizers subsidy. Out of the total allocations, Rs 38,200 crore was for Urea subsidy.
However, the funds provided under the Budget were not sufficient as the Fertilizer Ministry had more than Rs 30,000 crore as arrears from the previous year to pay for the manufacturers under Urea subsidy. As a result, the ministry has finally approached the Finance Ministry for an immediate release of additional funds.
In a country where Agriculture has been the backbone of the Indian Economy for quite a long time, the Government faces various challenges in terms of subsidies and drought conditions in various parts of India. To decrease the financial burden over the treasury, the Central Government had earlier implemented a slew of measures to increase the efficiency of the Urea manufacturers and in turn reduce the subsidy bill.
Under the new Urea policy, the Department of Fertilizers has issued new revised energy norms applicable to the existing 25 gas based urea plants in the country. The move is expected to save at least Rs 800 crore to the Government.
As per the records, the current Urea demand in the country is over 30 million tonnes, annually. In contrast, only 22 million tonnes are produced domestically and the rest is met through imports, the Economic Times said.