Govt introduces DBT in fertiliser, reduces subsidy allocation

Buoyed by success of DBT in LPG, the government today announced direct transfer of fertiliser subsidy to farmers on pilot basis in few districts but reduced the overall subsidy allocation to the sector.
In the budget 2016-17, the government pegged fertiliser subsidy at Rs 70,000 crore, lower than Rs 72,437.58 crore revised estimate for this financial year.
Out of this, Rs 51,000 crore has been allocated for urea and Rs 19,000 crore for decontrolled phosphoric and potassic (P&K) fertilisers.
As per the document, out of total Rs 51,000 crore allocated for urea subsidy, Rs 40,000 crore has been earmarked for domestic urea, while the rest is for imported urea.

Similarly, for decontrolled phosphoric and potassic fertiliser (like DAP and MoP), Rs 12,000 crore is allocated for indigenously produced and Rs 6,999.99 crore for imported P&K fertilisers, and Rs 1 lakh for assistance on production of city compost.
While tabling the Union Budget for 2016-17, the Finance Minister Arun Jaitley announced the direct benefit transfer on pilot basis for fertiliser.

"...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.

The Department of Fertilisers (DoF) is working on a roadmap 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.
Welcoming the move, the Fertiliser Minister Ananth Kumar said that this will empower the farmers and at the same it will help in balanced fertilisation.
"We want to empower the farmers so that he can make decision without being concerned about prices of fertilisers. I am sure the DBT in fertiliser will help in this. At the same it can also help in enabling balanced fertilisation," Kumar said.

However, the Fertiliser industry expressed dissatisfaction over decline in funds allocation for the sector.
"Our outstanding amount will be around Rs 45,000 crore by the end of the next financial year. While in case of DBT, they announced on pilot basis it would have been better if they have announced the road map for direct transfer of fertiliser subsidy," Fertiliser Association of India (FAI) Director General Satish Chander said.