In a move aimed at putting a check on fertiliser subsidy meant for farmers, the government has decided to introduce Direct Benefit Transfer (DBT) system for fertilizer subsidy payments on pilot project basis.
As per government communiqué, 100 per cent subsidy on various fertilizer grades would be released to the manufacturers and importers on the basis of actual sales made by the retailer to the beneficiaries.
Giving details about the implementation of the scheme, Minister of State (MoS) in Ministry of Chemicals and Fertilizers Mansukh L Mandaviya informed Lok Sabha that initially, the modified subsidy procedure under DBT system would be introduced on pilot basis in 16 select districts.
The new payment system would be rolled out in all states in the second phase after its due stabilization, Mandaviya said, adding that the proposed DBT will address the issues relating to diversion and smuggling of urea.
According to the minister, the DBT being implemented in fertilizer subsidy payment is slightly different from the normal DBT being implemented in LPG subsidy.
“Under the DBT in fertilizer sector, the subsidy would be released to the fertilizer companies instead of the beneficiaries, after the sale is made by the retailers to the beneficiaries on submission of claims generated in the web-based online Integrated Fertilizer Monitoring System (iFMS) by fertilizer companies,” Mandaviya told the lower house on Tuesday.
“After implementation of DBT, it is expected that diversion/smuggling of fertilizers would be reduced to a large extent and the government will save subsidy to that extent. However, no assessment has been made to calculate the savings,” he said.
The proposed DBT for release of fertilizer subsidy to fertilizer companies has no direct relation with landholding of the farmers. The fertilizers will be available to all on ‘no denial’ basis.
Talking to Millennium Post, Kalyan Goswami, an executive director of national Seed Association of India (NSAI), said that DBT on fertilizer subsidy would not only save Rs 50,000 crore of the government’s money but would also check misuse of fertilizer for purposes other than agriculture.