New Delhi, May 13 (IANS): The cabinet on Wednesday approved a new urea policy for the next four fiscals aiming to increase domestic production and reduce its subsidy burden by over Rs.4,800 crore, but left retail prices untouched.

"The policy will result in direct saving of subsidy of around Rs.2,618 crore and indirect saving of Rs.2,211 crore on account of revised specific energy consumption norms and import substitution, respectively, during the next four years. Total savings would be Rs.4,829 crore," the fertiliser ministry said in a statement.

"The MRP (maximum retail price) of urea for the farmers has been kept the same at Rs.268 per bag of 50 kgs. excluding local taxes. Farmers have to pay an additional price of only Rs.14 per bag of neem coated urea," it added.

According to the government, the policy will ensure timely supply of urea to farmers at the same retail price with lesser financial burden on the exchequer, besides reducing import dependence.

The policy will enable the domestic urea sector, with 30 urea producing units, to become more energy efficient, resulting in rationalisation of subsidy burden, the cabinet communique said.

The new policy is also expected to result in an additional production of around 20 lakh tonnes of urea per year.

The movement plan for urea would continue to be given by the government every month to urea suppliers, to ensure its timely and adequate availability in all parts of the country, it said.

"Beneficiaries of "his policy would be all the farmers of the country, urea industry and the government of India", it added.