Fertilizers Sector Being Primitive Part Of An Agrarian Economy Gets Laded With Direct Benefit Transfer
Post on 20,June 2017   4:00 AM
By - PolyEyes Staff
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Recently pilot projects being initiated to introduce Direct Benefit Transfer (DBT) in fertilizer sector in 16 districts of the countries. In these pilot projects, the subsidy would be given to the fertilizer companies rather than to the beneficiaries as given in DBT in LPG. This subsidy varies with different fertilizers and also from company to company.

What is Direct Benefit Transfer-DBT? DBT scheme was started in 2013 to reform the system of benefit delivery system in a convenient way and without subsequent deductions/manipulations reach directly to the bearers or the one’s it is being appropriated to.

It ensures accurate targeting of the beneficiaries by preventing redundancies and fraud.

Under Planning Commission, a mission was formulated to implement the DBT programmes.

In 2015 Modi government placed it under Cabinet Secretariat under Secretary (Coordination & PG).Now Jan Dhan, Adhaar and Mobile are the three enablers of DBT abbreviated often as JAM.

Fertilizer sector and direct benefits: Central government control over fertilizer sector is high reducing administrative complexity. Also Government already has a real time Fertilizer Monitoring System that monitors the fertilizer supply chains therefore the implementation can be more effective and closely monitored.

Fertilizer sector has high leakages of about 40% that can be highly reduced or prevented to make subsidies efficient and targeted.

Urea imports can be dechannelized allowing more agencies to import urea and giving them more freedom in procurement decision would allow flexibility in adjusting to demand. This will call on for healthy competitions and better satisfaction for value.

Bringing urea under nutrient based subsidy compared to current practice of cost based subsidy can motivate the farmers to go in for eco-friendly sustainable practices.

Government should dig in ways of long term supplies from locations where energy prices are cheap for instance gulf countries.

Universalization of banking via the Jan-Dhan Yojana, efficient targeting via Adhaar, and the increasing spread of smartphones, to extend DBT to fertilizer sector indirectly caters to broader prospect of financial inclusion and thus should be motivated more.

Economic Survey considers it ideal to introduce DBT in fertilizer sector with Direct Benefit Transfer given in cash

Biometrically Authenticated Physical Uptake (BAPU) – certifying identity using Adhaar and physically taking subsidized goods.

Concluding Remark: India is an agrarian economy and therefore fertilizers will always be a crucial sector to focus upon. By focusing more on pricing and segregating the subsidies based on its quality India achieve a sustainable environment too. Therefore such incentives are fruitful in various spheres but with respect to fertilizer subsidy, the fact that the beneficiaries and entitlements are not clearly defined can’t be ignored. Also specifically subsidy in case of Urea is more than double of the price marked on it. Therefore, farmer may be burdened financially to pay for MRP and subsidy upfront to receive the DBT afterwards. Government needs to look into the errors pertaining to its functioning before initiating new programs. Also they should take environment into consideration as promoting the excessive use of Urea and destroys soil health.


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