The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi has approved the proposal of Department of Fertilisers to continue Urea Subsidy Scheme upto 2019-20 at a total estimated cost of Rs. 1,64,935 crore and for disbursement of fertiliser subsidy. This decision implies that there will be no increase in price of urea, till 2020.
Urea subsidy is a part of Central Sector Scheme of Department of Fertilisers w.e.f April 1, 2017 and is wholly financed by the Government of India through Budgetary support. The continuation of Urea Subsidy Scheme will ensure the timely payment of subsidy to the urea manufacturers resulting in timely availability of urea to farmers. Urea subsidy also includes Imported Urea subsidy which is directed towards import to bridge the gap between assessed demand and indigenous production of urea in the country. It also includes freight subsidy for movement of urea across the country.
Government had earlier notified New Urea Policy, 2015, with the objectives of maximising indigenous urea production; promoting energy efficiency in urea production; and rationalising subsidy burden on the government.