Urea prices will not increase for farmers even as freight charges have been hiked on the nutrient by 10 per cent in the Rail Budget, Fertiliser Minister Ananth Kumar said today.
However, the subsidy outgo will increase due to the rail freight hike, the minister said after Railway Minister Suresh Prabhu today proposed to increase freight charges on urea by 10 per cent.
“Our government is pro-farmer. There will not be any increase in urea prices. With the increase of rail freight charges on urea, only subsidy paid for urea will increase. We will continue to provide urea at current price of ₹5,360 per tonne,” Kumar said.
The government had allocated about ₹2,000 crore for movement of urea for the year 2014-15.
According to officials, the estimated expenditure on movement of urea in the current year will be around ₹3,000 crore.
“With the increase in rail tariff the subsidy paid on movement of urea will increase by another ₹300 crore from current estimated expenditure of ₹3,000 crore,” Fertiliser Association of India Director General Satish Chander said.
However, Chander added that government must allocate appropriate funds for increase in subsidy.
The annual demand of urea is about 30 million tonnes, while the domestic production is at 22 million tonnes and rest is met through imports.