New Delhi : Fertiliser subsidy on urea may go up by Rs 350 per tonne as fertiliser ministry is seriously considering industry’s demand to raise the fixed production cost incurred by manufacturers.
Sources told PTI that the fertiliser ministry is likely to propose an increase of Rs 350 per tonne in cost of production of urea as against the industry’s demand for a hike of Rs 700 per tonne.
The proposal is being prepared for consideration of a group of ministers (GoM) headed by Agriculture Minister Sharad Pawar, they added.
Urea is sold at a maximum retail price (MRP) of Rs 5,360 per tonne to farmers. The government reimburses the difference between production cost and MRP to manufacturers in form of subsidy. India produces about 22 million tonnes of urea and imports 8 million tonnes to meet the shortfall.
In 2007, the government approved the New Pricing Scheme (NPS) Stage-III for urea units in the country. The scheme was originally effective from October 2006 to March 2010 and now it has been extended for three years. NPS III scheme was based on cost of production for 2002-03.