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Govt planning to transfer the fertilizer subsidy directly to the farmer’s account

26 Feb 2016 Evaluate

Extending the ambit of direct benefit transfer, the government is planning to transfer the fertilizer subsidy directly to the farmer’s account. A Parliamentary Standing Committee report has stated that the department of fertiliser (DoF) is working closely with the mission Direct Benefits Transfer (DBT) to implement it in fertilizers. It is working on a road map to capture the details of farmers, so that sales data can be captured and subsidy can be transferred to farmers’ accounts directly. The government will conduct a pilot project in 20 districts for direct transfer of subsidy on phosphoric and potassic fertilisers to the farmers. It has been reported that districts of Gujarat and Odisha are being selected to go for the pilot project.

In the current financial year 2015-16, the government has allocated about Rs 73,000 crore for the fertiliser subsidy. Out of the total for domestic urea the government has allocated Rs 38,200 crore and for imported urea Rs 12,300 crore. However, the remaining amount has been set aside for sale of decontrolled phosphoric and potassic fertilisers.

In April 2010, government had decontrolled phosphatic and potassic fertilisers, allowing manufacturers to fix their maximum retail price and get a fixed subsidy. At present, the subsidy is Rs 12,350 a tonne for phosphates and Rs 9,300 a tonne for potash. However, there is a growing view within the government that direct transfer of benefits to farmers would allow for sustainable and measured use of chemical fertilisers.

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