After foodgrain and LPG, direct transfer of benefits for fertilizers kicks in from Sunday

NEW DELHI: The government will launch the much-awaited direct benefit transfer (DBT) of fertiliser subsidy in Manipur, Mizoram, Nagaland, Daman and Diu, Dadra and Nagar Haveli, Puducherry and Goa on Sunday.

Additional secretary Dharam Pal told TOI, "Two-third of the states including Rajasthan, Haryana, Gujarat, Punjab, Andhra Pradesh and Himachal Pradesh will be covered from November 1 onwards. We will cover all states by January 1, 2018."

Unlike other DBTs such as cash transfer for foodgrains or subsidised gas connection where the subsidy amount is directly transferred to beneficiary accounts, in this case the subsidy will go to the manufacturer or marketing firm. The government will follow the no-denial policy, which means anyone can buy any quantity of fertiliser after giving details of his Aadhaar card at the retail outlet.

Under this scheme, the retail fertiliser outlets equipped with PoS machines will be able to read buyers' Aadhaar cards. As the farmer buys, the difference between market rate and the subsidised amount will be credited to the bank account of the manufacturer or the marketing company concerned.

Sources said this will be the first phase of DBT. After assessing the success of its implementation and capturing the details of consumption, government will consider to launch phase-II, which will be transferring the subsidy to the accounts of farmers.

Sources said records of sales and purchase will bring transparency about the quantity of fertilisers that companies are selling to farmers. Officials expect this will reduce the total sale by 10-15% and thereby reduce the burden on the exchequer by about Rs 6,000 crore annually.

This system of transferring subsidy directly to the manufacturer will continue till there is a clear definition of who is a farmer - the tiller or the land owner - which the agriculture ministry has to spell out. Once the beneficiaries are identified, the subsidy will be transferred to their bank accounts, said an official.