Direct Benefit Transfer (DBT) for fertilizer (Budget 2016)
In the annual budget session announced on 29th Feb, 2016 by the Finance Ministry head, Arun Jaitley, an announcement of Direct Benefit Transfer (DBT) in the subsidy granted on the fertilizers is being sanctioned. This DBT will be done as per plot basis and will be implemented in some selected districts of the country, where there is need of its implementation.
Plot basis DBT transfer
The annual budget of 2016 – 2017 has introduced the DBT for the fertilizer subsidy on plot basis. This means the benefits of the subsidies given by the central govt. on purchase of fertilizers will be allocated as per separate plot of farmland. This move will result in fewer discrepancies in the fertilizer subsidy distribution system. The subsidy amount against each plot will be calculated and will be paid to the farmer directly through bank transfer. Thus, the benefit will reach the actual beneficiary.
What is the working plan for this scheme?
For the direct transfer of benefits of the subsidy on the fertilizers, the Dept. of Fertilizers has already started to chalk out the working plan and implementation technique of it. To test its feasibility, the DBT scheme will be functional in some selected districts of the country, where there is an alarming need of it. After it gets success, it will be implemented all over the country. The procedure of registering the details of all the farmers who will get direct benefits on the fertilizer subsidy will be furnished soon and those with no bank accounts will be encouraged to open one.
Present annual subsidy on fertilizers
In the last year’s annual budget of 2015 – 2016, the Finance Minister had sanctioned a corpus of Rs. 73,000 crore for fertilizer subsidy. Following are some breakdown of the total amount:
|Total corpus for fertilizer subsidy||Rs. 73,000 crore|
|Implementation year||2015 – 2016|
|Allocation for domestic urea||Rs. 38,200 crore|
|Allocation for imported urea||Rs. 12,300 crore|
|Allocation for decontrolled phosphoric and potassic fertilizers||Rs. 22,468 crore|
Welcome move by the govt. in the fertilizer sector
The decision of DBT for the subsidies given on the fertilizers and also on other agricultural services is being welcomed by the Indian Farmers Fertilizers Cooperative Limited (IFFCO). According to IFFCO, this is a major step taken by the govt. to help the fertilizer sector from degrading. IFFCO feels that there is a need of hike in the prices of major fertilizers like urea so that the fertilizer manufacturing industries can survive from further downfall. It has hailed this union budget for being farmer friendly.
Why there was a need of DBT in the fertilizer industry?
The fertilizer industry was experiencing a burnt from the misuse of the subsidies given by the govt. on the fertilizers and other agricultural essentials. The middle men ate up all the subsidies and the end beneficiaries, the farmers, did not get any part of the govt. subsidy. That’s why to make the distribution system transparent, as earlier done in case of LPG distribution, the central govt. has introduced the policy of transferring the subsidy benefits, directly to the bank accounts of the farmers.
The implication of Direct Benefit Transfer (DBT) in other sectors
The DBT means the transfer of financial benefits which is being given by the Govt., directly to the beneficiaries. This scheme was launched by the central govt. in early 2013, where it decided to curve the growing malpractices, frauds and misuse of the subsidies given by the govt. in various units like in LPG cylinders, kerosene, fertilizers, agricultural tools, etc. Earlier, there were many cases of misuse of the subsidies given by the govt. on various services t the common people. So to ensure transparent subsidy reach to common people, DBT policy was taken where the benefits of subsidy will be transferred directly to the bank accounts of the beneficiaries.