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Fertilizer Firms to Get Subsidy for Customized Products via DBT w.e.f. May 23

Chander Mohan
Chander Mohan

Fertilizer manufacturers were able to get the subsidy on main products like urea, potash and DAP, but could not avail the incentive on sale of mixed fertilizers, forcing them to knock the door of the court.

On the court's direction, the fertilizer ministry has now notified an interim solution for sale of subsidized fertilizers to mixed/customized fertilizer manufacturing units under DBT system.

As per the laid procedure, the state agriculture department will approve a quantity of subsidized fertilizers required to be purchased by each licenced mixed/customized fertilizer makers.

The companies, which have got the quantity approved in writing by the state, will buy from a retailer using authorized Aadhar number of any of its employees.

Retailers will sell that specified quantity and type of fertilizer through PoS machines using authorized employee's Aadhar number.

Retailers have been asked to retain the copy of two authorization letters -- one by the state government for quantity approved and second the fertilizer maker authorizing employee to buy the fertilizer.

Fertilizer firms will have to buy from retailers the products like urea and DAP for manufacturing crop-specific soil nutrients in order to avail subsidy from the Government under the current DBT system.

This interim arrangement has been made for the next six months following a court order on a petition filed by some fertilizer makers seeking subsidy on mixed/customized products under the Direct Benefit Transfer (DBT).

The Government has introduced DBT in fertilizer sector from April under which subsidy is given to companies only after the product is sold to farmers at retail point through the point of sale (PoS) machines.

The Government provides subsidy to the tune of Rs 70,000 Crore annually. It is promoting customized fertilizers to ensure balance use of soil nutrients. Currently, mixed fertilizer comprise only 5-10 percent of the total production.

Both retailers and mixed fertilizers makers have been asked to maintain a separate register for purchase, production and sale of the final product.

These registers will be periodically checked once in every three months by the state agriculture department 

"This interim arrangement would be valid for a period of six months with effect from May 23, 2018. A long-term procedure would be notified by the department in due course," the notification added.

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