The Centre has initiated a pilot project to introduce Direct Benefit Transfer (DBT) in Fertilizer Sector in 16 districts of various States in India. Una in Himachal Pradesh, Kishanganj in Bihar, Hoshangabad in Madhya Pradesh, Karnal and Kurukshetra in Haryana, Kannur in Kerala, Nasik and Raigarh in Maharashtra, Tumkur in Karnataka, Rangareddy in Telangana, Krishna and West Godavari in Andhra Pradesh, Maldah and South 24 Paraganas in West Bengal, Narmada in Gujarat and Pali in Rajasthan districts are among them.
This was informed by Union Minister of State for Chemicals and Fertilizers, Mansukh L. Mandaviya, in a written reply in Rajya Sabha. The Minister further said that the Direct Benefit Transfer (DBT) being implemented in fertilizer subsidy payment is slightly different from the normal DBT being implemented in LPG subsidy. The Minister informed that 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.
Mandaviya further added that at present direct transfer of subsidy to beneficiaries like in LPG cannot be introduced in fertilizer sector as the beneficiaries and their entitlement is not clearly defined. Multiple subsidized products, urea and 21 grades of Phosphatic and Potassic fertilizers have different subsidy rates. The subsidy rate in respect of urea varies from company to company due to different production processes, energy efficiencies of plants, vintage etc. As the amount of subsidy in some fertilizers, particularly urea is more than double the maximum retail price (MRP), it will be a huge financial burden on the farmers to pay the MRP and subsidy upfront and receive the subsidy amount subsequently, he added.