Indian Govt. To Release Fertiliser Subsidies To Companies

Under the direct benefit transfer (DBT), the fertiliser subsidy will be released to the fertiliser companies, instead of beneficiaries, after the sale is made by the retailers to the beneficiaries, Mr. Rao Inderjit Singh, Chemicals & Fertilizers Minister informed the Lok Sabha recently.

He added that Niti Aayog has recently set up a committee for in-depth analysis of the issue and to recommend a model that could be used for direct transfer of subsidy to the farmers. At present, direct transfer of subsidy to beneficiaries like in LPG cannot be introduced in the fertiliser sector as the beneficiaries and their entitlements are not clearly defined, said a government press statement.

Mr. Singh, in a written reply to a question on progress of and feedback on DBT system introduced in fertiliser distribution in the country, informed that the government has introduced DBT system for fertiliser subsidy in a phase-wise manner across all sates. Under the fertiliser DBT system, 100% subsidy on various fertiliser grades shall be released/is being released to the fertiliser companies, on the basis of actual sales made by the retailers to the beneficiaries.

Financial burden on farmers

“Multiple subsidised products, urea and 21 grades of phosphatic and potassic fertilisers have different subsidy rates. In the case of urea subsidy varies from company to company due to different production processes, energy efficiencies of plants, vintage etc. Amount of subsidy in some fertilisers, particularly urea, is more than double the MRP. It will be a huge financial burden on the farmers’ pocket, to pay the MRP and subsidy upfront and receive the subsidy amount in his bank account subsequently,” the minister explained.

Procedural problems

Allaying all misconceptions regarding procedural (Aadhaar) formalities in the DBT system hampering timely distribution of fertilisers in some states, Mr. Singh informed that the sale of all subsidised fertilisers to farmers is being made through Point of Sale (PoS) devices installed at each retailer shop and the beneficiaries are being identified through Aadhaar Card, KCC, Voter Identity Card etc. In case, if any beneficiary is not having an Aadhaar Card, he/she is still being sold the fertiliser at subsidised cost on production of kisan credit card or voter identity card, along with his Aadhaar enrolment number, the minister added.

Mr. Singh informed that across the country, the Lead Fertilizer Supplier (LFS) has conducted 4,630 training sessions till date, as a part of ongoing PoS deployment and as a precursor to nation-wide rollout of DBT. Approximately 1.8-lakh retailers were sensitised during the introductory training sessions conducted by LFS.