Budget 2016 India: Government announces DBT in fertiliser subsidy on pilot basis

Government today announced to introduce direct benefit transfer of fertiliser subsidy to farmers on pilot basis in few districts of the country.

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

"...We have already introduced a direct benefit transfer (DBT) in LPG. Based on this successful experience, we proposed to introduce DBT on pilot basis for fertiliser in few districts in the country with a view to improving quality of service delivery to the farmers," Finance Minister Arun Jaitley said in his Budget speech for 2016-17 here.

Yesterday, calling for sweeping reforms in the fertiliser sector, the Economic Survey had also pitched for the DBT of fertiliser subsidy to the farmers.

The Department of Fertilisers (DoF) is working on a road-map to capture the details of farmers so that the sales data can be captured and subsidy can be transferred into the accounts of the farmers directly, according to a Parliamentary Standing Committee report.

In last year's Budget, the government had allocated about Rs 73,000 crore for the fertiliser subsidy in the current fiscal.

Out of the Rs 73,000 crore, Rs 38,200 crore has been allocated for domestic urea and Rs 12,300 crore for imported urea, respectively. The remaining Rs 22,468.56 crore has been earmarked for the sale of decontrolled phosphoric and potassic fertilisers.