Shares of eight fertiliser companies rose by 1.04% to 5.77% at 13:39 IST on BSE after the government approved a proposal to extend urea subsidy till 2020.
National Fertilizers (up 5.77%), Fertilisers & Chemicals Travancore (up 4.94%), Rashtriya Chemicals and Fertilisers (up 4.17%), Coromandel International (up 3.20%), Gujarat State Fertilizers & Chemicals (up 2.26%), Deepak Fertilisers & Petrochemicals Corporation (up 1.84%), Chambal Fertilisers & Chemicals (up 1.79%) and Zuari Global (up 1.04%), edged higher. Tata Chemicals was down 0.36%.
The S&P BSE Sensex was down 44.42 points, or 0.13% at 33,791.32.
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved the proposal of Department of Fertilizers to continue urea subsidy scheme upto 2019-2020 at a total estimated cost of Rs 164935 crore and for disbursement of fertilizer subsidy. This decision implies that there will be no increase in price of urea till 2020.
Urea subsidy is a part of central sector scheme of Department of Fertilizers with effect from 1 April 2017 and is wholly financed by the Government of India through budgetary support. The continuation of urea subsidy scheme will ensure the timely payment of subsidy to the urea manufacturers resulting in timely availability of urea to farmers. Urea subsidy also includes imported urea subsidy which is directed towards import to bridge the gap between assessed demand and indigenous production of urea in the country. It also includes freight subsidy for movement of urea across the country.
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