The Centre has introduced the direct benefit transfer (DBT) for fertiliser subsidies from this month in seven small states and union territories including Delhi, a senior official said on Wednesday.
Another 12 big states including Punjab, Madhya Pradesh and Andhra Pradesh are ready for the phase II launch next month and the target is to cover the entire country by January 2018, said the fertiliser ministry official.
The government 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 cooking gas subsidy.
“We have tweaked the DBT model for fertilisers so that there is no extra burden on farmers. Farmers will continue to get fertilisers at a subsidised rate and the government will pay subsidy to companies,” the official told a news agency, asking not to be identified.
In the DBT for cooking gas, customers buy gas cylinders at the market price and the government deposits the subsidy into the customer’s bank account later.
In case of fertilisers, farmers may not be able to make upfront payments because some of the soil nutrients are very costly. Therefore, farmers will continue to buy fertiliser from the retailer at subsidised rate and the transaction details will be recorded on the Point of Sale (PoS) machines.
The government will release the subsidy to companies only after checking the sale data uploaded on the website by the retailers, the official explained.
He said PoS machines, which will capture the details of farmers, the retailer and the transaction, have been deployed in most of the states.
“More than 60 per cent of deployment of the PoS machines been completed so far. There is no short supply of the machines. We hope all states to complete the exercise soon,” he added.
The DBT for fertiliser subsidy is being implemented from October 1 in seven states/UTs: Mizoram, Nagaland, Delhi, Puducherry, Goa, Daman and Diu, and Dadra and Nagar Haveli.
Another dozen states have been short-listed for launch next month. “We are doing an exercise how much load our system can take. Accordingly, we will add more states in phased manner. We intend to cover the entire country by January 2018,” the official noted.
Sharing about the benefits, the official said, “This will bring in more transparency as actual sale will be linked to subsidy payment. There will be better targeting of beneficiaries. Besides, the diversion of fertilisers to the industries will be stopped,” he said.
Since the sale data is electronically recorded, the payment of subsidy to companies will be faster without any delay, he said.
The government has launched DBT for fertiliser across the country after the successful pilot project undertaken in 19 districts.