Subsidy deliver mechanism for fertilisers might see minor changes

The union cabinet is likely to make some changes in the subsidy disbursement mechanism for fertilisers. Also, the use of jute bags might be made mandatory for foodgrain and sugar bags of over 25 kg.

Currently, 100% of the subsidy on Urea is given to the manufacturers as soon as the fertiliser is received at local levels. For Phosphate and Potash fertilisers, 85% is given on receipt similar to Urea and the remaining 15% is given when the state governments certify the sale of those fertilisers.

Officials in the know also said that the confirmation SMS from the dealers might be made mandatory before the disbursement of subsidy from the centre.

Though analysts expect the 85% reimbursement for P and K to be increased, industry officials feared that the 100% Urea reimbursement is not brought down.

The mobile based fertiliser monitoring system was started earlier this calendar year with an aim of direct transfer of fertiliser subsidy to the consumers along with the proper tracing of movement of subsidised fertilisers.

There have been complaints of subsidised Urea as well as Potash being diverted for industrial use while Urea was also allegedly getting smuggled into some bordering countries.