'Budget 2016-17 proposes fertiliser subsidy system reforms'

Chemicals and Fertilizers Minister Ananth Kumar has appreciated the measures proposed in Budget 2016-17 for the farm sector impacted by two successive poor monsoons, which includes reforms proposed for the fertiliser sector.

Outlining the next fiscal's initiatives proposed in the budget to reporters here on Wednesday, the minister said the Direct Benefit Transfer (DBT) scheme of cash transfers would be introduced for fertilizers on a pilot basis in a few districts in the country with a view to improving the quality of service delivery to farmers.

Calling for reform in the fertiliser subsidy system, the government's Economic Survey 2015-16 said last week that there is a major need to rationalise fertiliser subsidies and plug leakages in the system.

"There is a need to rationalise fertilizer subsidy in an input, crop and region neutral format and minimise diversions," said the Economic Survey 2015-16 authored by Chief Economic Advisor Arvind Subramanian.

"The disbursal of subsidy on fertilizers should shift to DBT, the benefits of which will be maximised, if all controls (including imports) on the fertilizer industry/outputs are lifted simultaneously," it said.

In a pre-budget meeting earlier with Finance Minister Arun Jaitley, the agriculture sector had sought extension of the DBT scheme for paying out fertiliser subsidies, in line with that in cooking gas and the December decision to start the scheme for kerosene.

Kumar said the Soil Health Card Scheme, by which farmers get information about soil nutrient levels, is now being implemented with greater vigour.

With the target to cover all 14 crore farm holdings by end of the next fiscal, Budget 2016-17 provides Rs.368 crore for the National Project on Soil Health and Fertility.

Besides, 2,000 model retail outlets of fertiliser companies will be provided with soil and seed testing facilities during the next three years, he said.

A policy for conversion of city waste into compost has also been approved under the Swachh Bharat initiative, the minister added.