The Economic Survey for 2013-14 tabled in Parliament on Wednesday lamented the government and farmers were together wasting funds of about more than Rs 8,500 crore on the fertilizer, while pitching for bringing urea under the Nutrient Based Subsidy (NBS) regime. (Agencies)
Arun Jaitley while presenting the budget speech on Thursday said, "A new urea policy would also be formulated."
"There have also been growing concerns about the imbalance in the utilization of different types of fertilizers resulting in deterioration of the soil," he added.
The Economic Survey has also asked for paying subsidy directly to farmers and said the fertiliser's highly subsidized price leads to its unbalanced use, which is also a reason for higher food prices and taxes.
"The issue is soil degradation due to declining fertilizer-use efficiency. While urea needs to be brought under the purview of NBS policy, the recommendation of the task force for direct transfer of subsidy under the chairmanship of Nandan Nilekani, for phased shifting to direct transfer of fertilizer subsidy to farmers, merits consideration on priority," the survey had said.
At present urea in under product based subsidy (PBS), under which for every tonne of urea farmers pay maximum fixed price of Rs 5,360 per tonne, whereas government pays about Rs 11,760 per tonne as subsidy for the same quantity, resulting in wastage of funds on government account.
As the urea price, which is the main source of nitrogen (N), is highly subsidized, farmers are using it in place of phosphorous (P) and potassium (K) leading to unbalanced fertilization in soil.
However, subsidies on P and K fertilizers were capped since 2010 after they brought under the NBS regime, and at present farmers pay 61 to 75 percent of its delivered cost while rest is subsidized by government.
The Economic Survey for 2013-14 tabled in Parliament on Wednesday lamented the government and farmers were together wasting funds of about more than Rs 8,500 crore on the fertilizer, while pitching for bringing urea under the Nutrient Based Subsidy (NBS) regime.