Taking steps to implement DBT in fertiliser subsidy

The government on Friday said it has started taking necessary steps to implement direct transfer of fertiliser subsidy to farmers in order to reduce leakages. "We need to cut subsidy leakages, not subsidies themselves. We are committed to the process of rationalising subsidies based on this approach..," the government said in its mid-year economic report placed before Parliament on Friday.

The report said that any leakages in fertiliser subsidy could be due to diversion for urea other than the agriculture purpose. In this regard the state governments are empowered to take action."Necessary steps are being taken to implement DBT (direct benefit transfer) in fertiliser subsidy," the report said.

In this year's budget, the government allocated nearly Rs 73,000 crore for fertiliser subsidy, of which about Rs 38,000 crore was earmarked for urea. The government has fixed the maximum retail price (MRP) of urea at Rs 5,360 per tonnes. The difference between the urea MRP and the cost of production is being reimbursed to the urea manufacturers.

Earlier this year, Fertiliser Minister Ananth Kumar had also said that the government is considering direct transfer of fertiliser subsidy to farmers on the lines of LPG. "The proposal for direct subsidy transfer to all farmers is under consideration of the government. We are considering it. It should be done shortly," Kumar had said. To rationalise the subsidy on P&K (phosphatic and potassic) fertilisers, the report said that the nutrient based subsidy (NBS) scheme has been introduced, under which a fixed amount of subsidy is provided on each grade of P&K fertilisers based on their nutrient content. Moreover, the government has made it mandatory for all the urea manufacturers to produce 100 percent neem coated urea for curbing illegal diversion of subsidised urea, it added.