June 15, 2012
India delays 10% urea price hike proposal
A proposal to hike the retail price of urea by 10% for this financial year has been deferred by the Indian government.
The hike was proposed by the fertiliser ministry to reduce the subsidy burden, limiting the excessive use of the soil nutrient in the country compared to phosphatic and potassic fertilisers. A hike in urea prices would have cut the fiscal deficit by around INR20 billion (US$359 million), a fertiliser ministry official, who didn''t wish to be named, said.
In 2011-12, urea is estimated to have contributed INR24,500 crore (US$4.4 billion) to the fertiliser subsidy bill.
"It (the proposal) has gone back to the ministry. They have to take a second look," Home Minister P. Chidambaram told reporters after a meeting of the Cabinet Committee of Economic Affairs.
The federal government regulates urea prices, which is fully controlled.
It was last revised in April 2010 from INR4,830 (US$87) per tonne to the current level of INR5,310 (US$95) a tonne.
Earlier, an empowered group of minister had approved deregulating the key fertiliser.