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Budget hikes fertiliser subsidy to boost farming sector


New Delhi, July 05: The government has proposed to hike fertiliser subsidy by around Rs. 10,000 crore in order to boost the farming sector in the country.

Presenting the Union Budget 2019-20 in Parliament on Friday, Nirmala Sitharaman proposed to hike fertiliser subsidy from 70,090.35 crore in Budget Estimates 2018-19 to Rs. 79,996 crore in Budget Estimates 2019-20.

Budget hikes fertiliser subsidy to boost farming sector

Out of this allocation, Urea subsidy comprises of Rs. 53,629 crore and Nutrient-based subsidies of Rs. 26,367 crore.

The Fiscal Policy statement of the Budget mentions that a total of 610.08 lakh metric tonnes (LMT) of fertilisers have been sold under Direct Benefit Transfer (DBT) scheme from March 2018 to May 2019.

It's notable that Modi 1.0 government in March decided to implement DBT for fertiliser subsidy payments across India, seeking to prevent diversion of fertilisers for commercial use and generate data on the usage of the nutrients to help farmers.

The government says that as this scheme has facilitated in removal of fake or duplicate beneficiaries, there has been a reduction of 120.88 MT in fertiliser sales to retailers after the implementation of DBT scheme.

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Further, the National Institutes of Pharmaceutical Education and Research (NIPER) have also seen a hike in allocations from Rs. 135 crores (Budget Estimates 2018-19) to Rs. 150 crores (Budget Estimates 2019-20).

Union Minister for Chemicals & Fertilizers, D.V. Sadananda Gowda thanked the Finance Minister for increased allocation towards the Fertiliser Subsidy and said that the increased allocation would further help in increasing the efficiency of subsidy transfers to the farmers through DBT.

Since farmers cannot be forced to pay large amounts upfront on fertilizers and wait for subsidy reimbursement, therefore the DBT model for fertilisers is different from other DBT models in which the beneficiaries receive the subsidy amount in their bank account.

Therefore, the government decided to pay the subsidy amount to fertiliser companies on sale of fertilisers to farmers at subsidised rates.

The fertiliser companies are required to capture details of the buyer, the quantity, Aadhaar number, land records wherever available and soil health at the time of sale using a point-of-sale machine.

The subsidy amount is being paid to the fertiliser companies within a few days of sales.

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