Sales of subsidised fertilisers to neighbouring nations fall post DBT: Study

Sales of highly subsidised fertilisers to neighbouring countries have come down following the introduction of direct benefit transfer (DBT) scheme in the sector, according to a study.

Financial inclusion consulting firm MicroSave has evaluated pilot runs of DBT in the fertiliser sector, which was launched by the Centre in 14 districts across 11 states.

"Anecdotal evidence suggests that cross-border sales across states and country have decreased after introduction of DBT in fertilisers.

"Such sales occur, for instance, from Kishanganj to Nepal and Bangladesh, and from Karnal district of Haryana to Uttar Pradesh," MicroSave said in a report.

The Centre bears about Rs 70,000 crore annually as fertiliser subsidy to provide cheaper nutrients to farmers. The DBT being implemented in the case of fertiliser subsidy payment is slightly different from the normal DBT implemented in LPG subsidy.

Under DBT in the fertiliser sector, the subsidy is released to the companies instead of the beneficiaries, after sale by the retailers.

The Centre has already rolled out DBT programme in most states. Urea is highly subsidised by the government and the maximum retail price now stands at Rs 5,360 per tonne.

In its report, the consultant said that the transaction experience for farmers under the DBT system has been improving.

"There has been a dramatic increase in successful Aadhaarbased authentication at the first attempt to 62 per cent, in three attempts to 97 per cent and rest in more than three attempts. The failure rate for Aadhaar authentication is at 3.4 per cent," it said.

MicroSave suggested that the government should proactively consider issuing licences to new retailers to streamline the nation-wide launch.