Why does the Government of India promote the use of Neem-coated Urea in agriculture?

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Urea is an important supplier of nitrogen, which is necessary for the development of plants. But only 30-40 per cent of nitrogen present in the urea is utilised by crops. The rest gets degraded.When ordinary urea is applied, it gets converted to ammonium carbamate. Some of this gets converted to ammonia gas in what is called ammonia volatilisation. About 8-10 per cent nitrogen is lost during volatilization. The rest of the ammonium carbamate undergoes chemical transformation and nitrates are formed. Some of these are absorbed by the plants. The rest are either leached into the underground water or are denitrified to gaseous nitrogen and nitrous oxide under anaerobic conditions (absence of oxygen).Neem has properties that check nitrogen loss at each stage. It slows down the process of nitrate formation and hence excess nitrate is not available for denitrification. When farmers use this urea, the slow release of nitrogen helps the fertility of the soil. Therefore, there will be more yield to the extent of 15-20%.Also, the higher usage of neem-coated urea would check diversion of urea for industrial use. Neem coated urea also works as insecticide.Source: Economic Survey (2015-16)