New Delhi: The government is making another effort to break the stalemate on urea price deregulation, with inter-ministerial discussions likely to begin shortly.
Two draft urea pricing policy proposals—one by the Planning Commission supporting deregulation, and the other by the fertilizer ministry opposing it—will be circulated soon to the finance, agriculture and law ministries for their views, an official with direct knowledge of the matter said.
Stalled proposals: Fertilizer minister M.K. Alagiri. By PIB
After the inter-ministerial consultations, the draft could be placed before the cabinet committee on economic affairs (CCEA) within a month, said another official.
At present, the government fixes the maximum retail price at which urea is sold. In April 2010, it deregulated the prices of all other fertilizers. India’s urea subsidy bill stood at Rs 23,900 crore in 2010-11 and is estimated to be around Rs 24,500 crore this fiscal year.
The issue of urea price deregulation was also discussed in a meeting chaired by Pulok Chatterji, principal secretary to the Prime Minister, on Monday, the first official cited above said.
The meeting was called to discuss the issue of the runaway increase in the prices of non-urea fertilizers. It was attended by officials from the ministries of fertilizer, agriculture and finance.
Union fertilizer minister M.K. Alagiri has so far stalled the urea deregulation proposal. He has opposed freeing prices in several letters to Prime Minister Manmohan Singh and finance minister Pranab Mukherjee, expressing fears that such a move may lead to a rise in prices, hurting the interests of farmers.
The fertilizer ministry has been at odds with the finance ministry, the Planning Commission and the Prime Minister’s Office (PMO), which have supported deregulating prices.
The PMO has asked the fertilizer ministry to expedite the decontrol process, according to a 3 October report by PTI.
At a 5 August meeting of a group of ministers (GoM), led by finance minister Mukherjee, it was decided that the two draft proposals on urea pricing should be put before the CCEA for its consideration.
Several ministers who were at the meeting had reservations about deregulating urea prices, one of the ministers and the two officials cited above said independently.
The GoM included junior minister of chemicals and fertilizers Shrikant Kumar Jena, home minister P. Chidambaram, petroleum minister S. Jaipal Reddy, agriculture minister Sharad Pawar, and K.V. Thomas, junior minister for agriculture and food and public distribution.
Alagiri was not present at the 5 August meeting.