DBT system on Fertilizer Subsidy will be introduced on pilot basis in 16 select districts: Mandaviya
Updated: Nov 29, 2016 10:45:48am
DBT system on Fertilizer Subsidy will be introduced on pilot basis in 16 select districts: Mandaviya
New Delhi, Nov 29 (KNN) The Government has decided to introduce Direct Benefit Transfer (DBT) system for fertilizer subsidy payments under which 100% subsidy on various fertilizer grades shall be released to the manufacturers and importers on the basis of actual sales made by the retailer to the beneficiaries, Parliament was informed today.
The Minister of State (MoS) in the Ministry of Chemicals and Fertilizers, Shipping, Road Transport & Highways Mansukh L. Mandaviya informed the Lok Sabha that initially, the modified subsidy procedure under DBT system will be introduced on pilot basis in 16 select districts and after its due stabilization, the new payment system would be rolled out in all states in the second phase.
The proposed DBT will address the issues relating to diversion and smuggling of urea.
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 will 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.
“After implementation of DBT, it is expected that diversion/smuggling of fertilizers will be reduced to a large extent and the Government will save subsidy to the 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.
According to some industry experts, if government comes out with Direct Benefit Transfer (DBT) to provide fertiliser subsidy directly to all the farmers in the country, that would save the government at least Rs 50,000 crore, said an industry expert.
Talking to KNN, S K Aggarwal, Chairman, Vimal Organics Ltd, had said 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.
Meanwhile, Economic Survey this year highlighted that even as the government spends Rs 73,000 crore annually, which is around 0.5% of the GDP – on fertiliser subsidy, almost 41% of urea is diverted to the industry or smuggled across borders to Bangladesh and Nepal.
The Survey proposed direct transfer of fertiliser subsidy to farmers and a comprehensive reform package in the fertiliser subsidy to address the problems of leakages and skewed mix of fertiliser use. (KNN Bureau)
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