Urea Subsidy:
The Central Government of India fully funds the urea subsidy through financial assistance as part of the department’s Central Sector Scheme (CSS). Urea is provided to farmers at a legally set price in order to support sustained agricultural development and encourage balanced nutrient application.
- As a way to close the gap between the estimated demand and domestic urea production in the nation, it also contains imported urea subsidies. Additionally, it contains transport subsidies for the nationwide transportation of urea.
- The sustainability of the urea subsidy program will guarantee payment of the subsidy to urea producers, resulting in the quick availability of urea to farmers.
- The major component of the fertilizer subsidy is the difference between the delivery cost of fertilizers at the farm gate and the MRP that the farmer must pay.
- Chemical fertilizers have played a critical part in making India self-sufficient in food grain production and are a critical input for Indian agriculture’s growth.
- The Central Government provides it to the producer and importer of fertilizer.
- Implementing DBT in the fertilizer industry will stop breaches and reduce the diversion of fertilizers to non-agricultural uses.
History of the Urea Subsidy:
- To control the sale, cost, and quality of fertilizer, the Fertilizer Control Order was issued in 1957. Later in 1973, the Movement Control Order was issued to control fertilizer delivery.
- The 1973 oil crisis raised the price of fertilizer, which decreased consumption and raised food costs. Therefore, the government-supported producers in 1977.
- The government deregulated the import of DAP (di-ammonium phosphate) and MOP (Muriate of potash) in 1992 as the BoP issue grew severe. But urea imports are still limited and controlled.
India’s Urea Policy:
- The Central Government significantly subsidizes urea, which is the main source of nitrogenous fertilizer. The only fertilizer that is still under control as of right now is urea.
- The Department of Fertilizers’ urea subsidy is classified as a Central Sector Scheme, and the Central Government is fully responsible for funding it.
- In 2015, the Department of Fertilizers developed a policy.
- A comprehensive New Urea Policy 2015 for the following four financial years was approved by the Union Cabinet in May 2015. (June 2015 to March 2019).
New Urea Policy 2015:
Its main objectives are:
- Increase domestic urea production to decrease reliance on imports and the government’s subsidy burden.
- Encourage energy efficiency to lower carbon footprint and environmentally friendly urea manufacturing. Revisions to the specific energy usage guidelines will accomplish this.
- Make the urea production facility employ the greatest technologies available so it can compete internationally.
- Timely delivery of urea at the same MRP to the farmers.
- Optimizing energy efficiency in the manufacture of urea.
- The subsidy burden on the Government of India is to be rationalized.
The government estimated that the new urea policy will save directly 2618 crore rupees and indirectly 4829 crore rupees. Additionally, it plans to produce 20 lakh additional tonnes of urea annually.
Currently, the government-funded standards for various plants based on their period are different from the actual energy usage of the urea plants. A unit’s profitability increases as its energy efficiency increases. The government has toughened these standards for the ensuing four years with the 2015 New Urea Policy.
The ultimate goal is to get these devices to use as little power as possible in order to receive the most rewards. Because of the new regulations, the industry will not be able to get the same amount of incentives as before, which is positive for the government but slightly bad for the sector. To generate urea effectively, enterprises will need to reduce their energy usage and implement the latest technologies.
Fertilizer Sector of India:
After China, India is the country that uses the most urea fertilizers. In terms of phosphatic fertilizer output, it comes in third place, but imports are necessary to meet the demand.
Types of Fertilizer:
| Primary |
Nitrogenous (Urea), Phosphatic (DAP), Potash-based (MOP) |
| Secondary |
Fertilizers include Ca(Calcium). Mg(Magnesium), and Sulphur (S) |
| Macronutrients |
Include Iron, Zinc, Boron, Chloride |
Related Frequently Asked Questions & Answers:
1Q. Who fully funds the financial assistance for the New Urea Policy 2015 Scheme?
Answer: The Central Government of India fully funds the urea subsidy through financial assistance as part of the department’s Central Sector Scheme (CSS). As a way to close the gap between the estimated demand and domestic urea production in the nation, it also contains imported urea subsidies. Additionally, it contains transport subsidies for the nationwide transportation of urea.
2Q. Write about the Fertilizer Sector of India?
Answer: After China, India is the country that uses the most urea fertilizers. In terms of phosphatic fertilizer output, it comes in third place, but imports are necessary to meet the demand.
- Type of Fertilizers- Primary, secondary, and macronutrients.
- Primary: Nitrogenous (Urea), Phosphatic (DAP), Potash-based (MOP)
- Secondary: Fertilizers include Ca Calcium), Mg (Magnesium), and Sulphur (S)
- Macronutrients: Include Iron, Zinc, Boron, Chloride
3Q. What Happened in the year 1973 Related to the Fertilizer Sector of India?
Answer: In 1973 oil crisis raised the price of fertilizer, which decreased consumption and raised food costs. Therefore, the government-supported producers in 1977. The government deregulated the import of DAP (di-ammonium phosphate) and MOP (Muriate of potash) in 1992 as the BoP issue grew severe. But urea imports are still limited and controlled.
4Q. What are the objectives of the New Urea Policy 2015 by the Department of Fertilizers?
Answer: In 2015, the Department of Fertilizers developed a policy.
- Increase domestic urea production to decrease reliance on imports and the government’s subsidy burden.
- Encourage energy efficiency to lower carbon footprint and environmentally friendly urea manufacturing. Revisions to the specific energy usage guidelines will accomplish this.
- Make the urea production facility employ the greatest technologies available so it can compete internationally.
- Timely delivery of urea at the same MRP to the farmers.
- Optimizing energy efficiency in the manufacture of urea.
- The subsidy burden on the Government of India is to be rationalized.
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