Government Plans Rs 1 trillion Subsidy on Fertilizers in the Next Fiscal Year

Upon clearing the deficit towards farmers, the fertilizer dept offered a subsidy of Rs. 1 trillion for the next fiscal, which brought the overall subsidy allocation in this fiscal to rupees 1.36 trillion, along with an additional allocation of rupees 65,000 crore allowed as part of the economic spending plan, as per a government official pertaining to the discussions. 

The Centre may likewise reveal an aspiring plan to move the subsidy straightforwardly to the bank accounts of possibly 140 million farmers in the nation, rather than financing manufacturers who currently sell at subsidized amounts, the authority stated. 

In FY19 and FY20, fertiliser subsidies were about 70,605 and 79,998 crore, or 10 to 11 percent of the overall budget of the government on different programmes. Increases in the present and next fiscal years are projected to broaden the fiscal gap of the Centre. 

One need for the following financial year is to broaden the direct benefit transfer (DBT) program in the division to farmers. As of now, the program, which was started as a pilot back in 2017 and expanded across the country in 2018, moves subsidy to producers dependent on information caught in the retail location or PoS (point of sale) devices at the retail store.

Utilizing sales deal information caught on a continuous real-time basis for subsidy payments was an advancement over the past framework, which depended on the reviewed audited books of the makers. In FY19, this had prompted savings fund of about rupees 10,000 crore, yet it is difficult to figure the savings funds in the consecutive years as components, like, fertilizer sales and cost of natural gas utilized in urea creation, the authority said. Presently, the exertion is to move the subsidy straightforwardly to the financial accounts of the farmers. 

The Centre’s implementation of the DBT Programme in fertilizers has so far been remarkably constant attributable to the involved complexities and the way that it is as yet provided to manufacturers however it is driven by innovation and dependent on exchange information caught at the retail level. 

"Exchanges are currently going on about the universe of recipients to be covered, the meaning of farmers under the plan, and it’s common sense parts. The aim is to cover each farmer, including those farmers who are tenants, panchayat land tillers, and farmers who possess lands. One option is to launch the plan on a pilot premise," the individual said. 

As of now, PM Kisan Yojana, the pay uphold scheme for farmers, covers just landowners and helps more than 100 million farmers; it offers a major piece of the information needed for the fertilizer DBT project. A critical assignment for the Centre is to guarantee that landowners don't stash the subsidy implied for farmers. 

The Centre’s objective in reconsidering the support scheme is to ensure plant supplements are utilized in a fair manner, redirection of fertilizer across country’s boundaries is checked, and subsidy installments are accurately provided to the farmers. 

"Assuming that the DBT is to be started, wherein farmers straightforwardly get the subsidy amount. Just like the LPG subsidy Programme, a convenient installment of subsidy is directly issued to the farmers bank accounts is the reason behind the success of the program. While the public authority can effortlessly get the bank details of the farmers, without opportune installment of subsidy, farmers will be put to burden as the market cost of fertilizers could surge by 40 percent on account of NPK (nitrogen, phosphorus, potash) fertilizers and 250 percent on account of urea," said K. Ravichandran, deputy CRO at ICRA Ltd.