New Urea Policy: Benefits

New Urea Policy: Benefits

Question - Union Cabinet has recently given approval to a comprehensive New Urea Policy 2015. Discuss the benefits of this and other steps for maximisation of indigenous urea production to benefit the agricultural sector.

A comprehensive New Urea Policy 2015 has been approved by the Union Cabinet

• It has given approval for this policy for the next 4 fiscals

• Policy aimed at maximisation of indigenous urea production

• It also envisions energy efficiency in urea units for reducing subsidy burden on Government and reducing carbon footprint

• New policy will enable the domestic urea sector to incentives urea units to maximise their production at the same time as well

• Policy will ensure timely urea supply at Maximum Retail Price with lesser financial burden on the exchequer

• Import dependency in the urea sector will also be reduced

• Urea units will also access top technologies and be internationally competitive

• Policy will promote subsidy saving of INR 2618 crore directly and INR 2211 crore indirectly

• It is expected to increase production by about 20 lakh MT per year

• Beneficiaries of this policy include the urea industry, farmers and the government

• Government has also approved gas pooling policy under which urea units will obtain gas at uniform price

Other Steps

• Government has also decided to allow urea producers to produce neem coasted urea up to 100% of production

• It has made it mandatory to produce close to 75% of domestic urea as neem coated

Benefits of this are:

• Neem coated urea is less required in quantity

• It uses the same plot size to give higher crop yields

• Underground water contamination due to urea leaching gets reduced with neem coasting since nitrogen in this type of urea gets released to plants extremely slowly

• It is not suited for industrial use so chances of illegal diversion to industries will be lower

• Moreover, farmers only have to pay additional price of INR 14 per bag of neem coated urea

• Timely availability of this type of urea will be provided in all parts of the nation

Facts and Stats

• Import dependency for urea is likely to reduce as a result of steps taken by centre

• Currently, India is importing around 80 lakh metric tonnes of urea

• A total demand of 310 lakh metric tonnes of urea exists in India currently