On the progress on Direct Benefit Transfer (DBT) system introduced in fertiliser distribution in India, Minister of State (IC) for Chemicals & Fertilizers, Rao Inderjit Singh said in the Lok Sabha, the Government has introduced Direct Benefit Transfer (DBT) system for fertiliser subsidy in a phase-wise manner across all States and Union Territories. Under the fertiliser DBT system, 100 percent subsidy on various fertiliser grades shall be released or is being released to the fertiliser companies, on the basis of actual sales made by the retailers to the beneficiaries.
The Minister added that the sale of all subsidised fertilisers to farmers and buyers is being made through point-of-sale (PoS) devices installed at each retailer shop and the beneficiaries are being identified through Aadhaar Card, Kisan Credit Card (KCC), Voter Identity Card among other identity proofs. Implementation of the DBT Scheme requires deployment of PoS devices at every retailer shop, training of retailers and wholesalers for operating PoS devices.
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.
Further, replying on the feasibility to introduce DBT system for providing fertiliser subsidy directly to farmers, Singh said that under the DBT scheme, the subsidy will be released to the fertiliser companies, instead of beneficiaries, after the sale is made by the retailers to the beneficiaries.
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. 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 among other reasons. Amount of subsidy in some fertilisers particularly urea is more than double the maximum retail prices (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.
However, NitiAayog 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, Singh added.