A urea price hike is in order to curb subsidy outgo and redress nutrient imbalance A Group of Ministers (GoM) was set up last year to suggest a suitable hike in urea price to neutralise increase in energy cost, so that subsidy can be reined in. The Government, however, has categorically ruled out any increase until general elections. The maximum selling price (or MRP) of urea has been under control since 1957. Until the late 70s — a period of low inflation and low feedstock price — the MRP was higher than the cost of production and distribution. Hence, there was no subsidy. Since 1977, equation was reversed, with cost exceeding selling price. The Government had to give subsidy to manufacturers. From ₹266 crore in 1977-78, subsidy rose to ₹5,796 crore in 1992-93 and further to ₹35,398 crore in 2012-13. An increase in urea MRP holds the key to curtailing … Continue reading Enough of this urea populism