Direct transfer of subsidy like in LPG cannot be introduced in fertilizer sector: Centre

Union Minister of State for Chemicals and Fertilizers, Shipping, Road Transport & Highways, Mansukh L. Mandaviya on Friday said that the direct transfer of subsidy to beneficiaries like in Liquefied Petroleum Gas (LPG) cannot be introduced in fertilizer sector as the Direct Benefit Transfer (DBT) being implemented in both the sectors are different.

Mandaviya in his written reply to the Rajya Sabha, stated that under the DBT in fertilizer sector, the subsidy is released to the fertilizer companies instead of the beneficiaries, after the sale is made by the retailers to the beneficiaries.

He added that at present the 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 & 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," he wrote in his letter.

"As the amount of subsidy in some fertilizers, particularly urea is more than double the 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," he added.

He also informed about the pilot project being undertaken in 16 districts to introduce DBT in Fertilizer Sector.