Urea is provided to the farmers at a statutorily notified Maximum Retail Price (MRP). The MRP of the 45 kg bag of Urea is Rs. 242 per bag (exclusive of charges towards neam-coating and taxes as applicable) and the MRP of 50 kg bag of Urea is Rs. 268 per bag (exclusive of charges towards neam-coating and taxes as applicable).
The difference between the delivered cost of fertilisers at farm gate and net market realization by the urea units is given as subsidy to the Urea manufacturer/Importer by the Govt of India. Accordingly, farmers are getting Urea at affordable MRP because of the subsidy provided by the Government.
Phosphatic & Potassic fertilisers
As far as Phosphatic and Potassic fertilizers are concerned, the Government has implemented Nutrient Based Subsidy Policy w.e.f. 01.04.2010 for Phosphatic and Potassic (P&K) fertilizers. Under the said policy, a fixed amount of subsidy decided on an annual basis, is provided on each grade of subsidized P&K fertilizers depending on their Nutrient content.
As the P&K fertilisers are decontrolled, the Maximum Retail Price (MRP) is fixed by Companies as per market dynamics at a reasonable level. The MRP printed on each bag of these fertilizers is inclusive of subsidy given by the Government of India. Accordingly, any farmer who is procuring these fertilisers at MRP is availing the benefit of the subsidy.
Drop in production of urea
The production of Urea in three consecutive years 2016-17 to 2018-19:
| Year | Production of Urea ( In 'LMT') |
| 2016-17 | 242.01 |
| 2017-18 | 240.23 |
| 2018-19 | 240.00 |
The Government of India notified the New Urea Policy (NUP) – 2015 for existing gas-based Urea manufacturing units on 25th May 2015 and revision of energy norms under New Urea Policy (NUP) – 2015 on 28th March, 2018.
NUP-2015 has led to additional production of approximately 20 Lakh Metric Tonnes (LMT) in 2015-16 as compared to 2014-15, from the existing gas-based urea plants and the total production of urea during the year 2015-16 was 244.75 LMT i.e. the highest ever urea production in the country.
The production of Urea has slightly dropped in the last 3 years since 2016-17. The reasons for the drop in productions due to the shutdown of some plants on account of maintenance jobs, annual turnaround, power failure, natural calamities, etc.
Plan for revival of closed units of the country:
- Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 4.8.2011 approved revival of Talcher unit of FCIL through nomination route by forming a Special Purpose Vehicle (SPV) / Joint Venture (JV) of GAIL, CIL, RCF and FCIL and revival of Ramagundam unit of FCIL by forming a SPV / JV of NFL, EIL and FCIL.
- CCEA approved the revival of the Gorakhpur &Sindri units FCIL and Barauni unit of HFCL on 13.07.2016 through nomination basis by an SPV of NTPC, CIL, IOCL, and FCIL / HFCL.
Plan for revival of 5 plants:
| Sl. No. | Place / State | Ramagundam, Telangana | Talcher, Odisha | Sindri, Jharkhand | Gorakhpur, Uttar Pradesh | Barauni, Bihar |
| 1 | Name of JV/ SPV company reviving | M/s. Ramagundam Fertilizers & Chemicals Ltd | M/s. TalcherFertilizers Ltd | M/s. Hindustan Urvarak&Rasayan Limited (HURL) | M/s. HURL | M/s. HURL |
| 2 | Capacity(in MT/Annum) | 12.7 | 12.7 | 12.7 | 12.7 | 12.7 |
| 3 | Cost of project (Rs. in crores) | 6120.55 | 13277 (±10%)(as per revised DFR) | 6977.01 | 7085.77 | 7043.26 |
| 4 | Anticipated Year of Commission-ing | 2020 | 2023 | 2021 | 2021 | 2021 |
| 5 | Equity contribution | NFL – 26%EIL – 26%FCIL – 11%State Govt of Telangana -11%
GAIL -14.3% HTAS Consortium-11.7% |
RCF - 29.67%CIL - 29.67%GAIL-29.67%FCIL-10.99% | NTPC - 29.67%IOCL - 29.67%CIL - 29.67%FCIL - 10.99% | ||
(This information was given in a written reply by the Union Minister of Chemicals & Fertilizers, Shri. D.V. Sadananda Gowda in Rajya Sabha)
