Lucknow, Aug 12 (KNN) 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.

This was also highlighted in the Economic Survey this year.

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.

In line with this, Central Government in the Budget this year announced to introduce Direct Benefit Transfer (DBT) of fertiliser subsidy to farmers on pilot basis in few districts of the country.

The majority of country's annual subsidy of about Rs 73,000 crore is paid to the manufacturers of controlled fertiliser urea.

Keeping pace with the Centre, Uttar Pradesh which would have its Assembly polls next year, started DBT of fertilizer subsidy to farmers.

Talking to KNN, Saravjeet Ram, Special Secretary, Department of Agriculture, Uttar Pradesh said, “There is a registration process where farmers can go to Kisan Sewa Kendra with a copy of their Khatauni (land records) and get them registered.”

“There are many columns like name, father name, address, what they produce, what they seed, bank account number, total land are filled up. Later the benefit directly gets transferred into his bank account,” he added.

Ram said there were many challenges initially as the farmers were not comfortable using computers.

“The farmers were not happy with the scheme. They said they don’t know computing then how they will manage with it. But later they understood everything. The entire process has done away with the brokers. It brought transparency.”

He said, “Another benefit of the scheme was that other government departments also got the data and this data is very useful for them if they want to implement any scheme.”

Ram said now the subsidy is directly going to the farmers’ account.

“Earlier farmers did not know that there is something like DBT scheme. Smart people used to get the benefits out of it.  No third person can make money out of it as it is being transferred directly to the accounts of the farmer,” he said.

UP created the online database of over 40 lakh farmers, each assigned a unique ‘Kisan ID’ identifying their village, land particulars, bank account and mobile numbers.

“Uttar Pradesh started DBT with seed subsidy. We got money from the central government under the DBT scheme of fertilizers. The all DBT subsidies are online,” Ram said.

This DBT portal was used to transfer Rs 140 crore of subsidy on seeds into the accounts of some nine lakh farmers during the recent rabi season.

The subsidy is provided ‘at source’. Thus, in the case of fertiliser or foodgrains and kerosene sold through the public distribution system, consumers pay below-market rates. The gap between the market price and the lower consumer price for these products is covered by the subsidy.

The DBT system, on the other hand, entails consumers paying the full market price for the commodity upfront. The admissible subsidy is, then, transferred separately to their bank account. (KNN Bureau)