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Showing 2 of 6 articles, those that changed from 1 to 31 July 2026.Show all
Urea policy and the fertiliser subsidy
Copy link to Urea policy and the fertiliser subsidyPrelims and Mains
LeadUrea: a new investment policy and an old subsidy problemJuly 2026
Why in news
On 15 July 2026 the Cabinet approved the National Investment Policy for Urea, 2026, to draw investment into new gas based urea plants. In June the fertiliser subsidy for the year had been projected at double the Budget's figure, as import prices rose.
Background
- Urea is sold to farmers at a price fixed by the government, far below its cost. The Centre pays the difference to the maker or importer.
- Other fertilisers, those with phosphorus and potash, come under the Nutrient Based Subsidy, where the subsidy is fixed and the price is free to move.
- India makes about three quarters of the urea it uses and imports the rest. Most plants run on natural gas, and much of that gas is imported too.
- So the price of gas and of urea abroad passes straight into the subsidy bill.
What the new policy does
- It assures investors a return on equity within a band.
- It aims at eight or nine new plants, adding about 10 million tonnes a year, enough to close the import gap.
- It follows the policy of 2012, which brought six new plants.
Why the subsidy is a problem
- Fiscal: the bill swings with world prices and is hard to budget.
- Soil: cheap urea is overused. Nitrogen, phosphorus and potash should be applied at about 4:2:1; in practice nitrogen far exceeds that.
- Environment: excess nitrogen pollutes groundwater and gives off nitrous oxide, a greenhouse gas.
- Leakage: subsidised urea is diverted to industry and across borders.
- Dependence: making urea at home still needs imported gas, so self reliance in urea is not self reliance in energy.
The way forward
- Bring urea under the Nutrient Based Subsidy, so that prices signal balanced use.
- Move in time to a direct transfer to the farmer, for each acre or each unit of nutrient.
- Promote nano urea, coated urea and organic sources.
- Use soil health cards to guide the dose.
Prelims facts
- Urea supplies nitrogen; it is 46 per cent nitrogen.
- Urea is under statutory price control; phosphatic and potassic fertilisers are under the Nutrient Based Subsidy, in force since 2010.
- All urea made or imported for farming is neem coated.
- India imports about a quarter of its urea.
- The Department of Fertilisers is under the Ministry of Chemicals and Fertilisers.
Urea is sold to farmers at a price fixed by the government, far below its cost. The Centre pays the difference to the maker or importer.
What changed
15 Jul 2026LeadUrea: a new investment policy and an old subsidy problem
See also: Fertiliser registration and nutrient use efficiency
Pradhan Mantri Kisan Samman Nidhi
Copy link to Pradhan Mantri Kisan Samman NidhiPrelims
The Pradhan Mantri Kisan Samman Nidhi pays farmers ₹6,000 a year in three instalments.
What changed
31 Jul 2026Briefnewly addedThe Cabinet continued the scheme from 2026-27 to 2030-31 with ₹3.15 lakh crore, keeping the ₹6,000 a year. It has paid 23 instalments, the latest to 9.49 crore farmers. Press Information Bureau, 31 Jul 2026: Cabinet approves continuation of the Pradhan Mantri Kisan Samman Nidhi to 2030-31 (opens in a new tab)