Lok Sabha Question No. 1702 (UNSTARRED), answered on 2018-03-06
Subject: Direct Benefit Transfer
Ministry: CHEMICALS AND FERTILIZERS
Asked by: M. CHANDRAKASI

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS AND FERTILIZERS DEPARTMENT OF FERTILIZERS

## LOK SABHA

UNSTARRED QUESTION NO. 1702 TO BE ANSWERED ON: 06.03.2018

## Direct Benefit Transfer

## 1702.  SHRI M. CHANDRAKASI :

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) the details regarding the progress of and feedback on Direct Benefit Transfer (DBT) system introduced in fertilizer distribution in the country;
- (b) whether  it  is  fact  that  procedural  (Aadhaar)  formalities  in  the  DBT  system has  hampered  timely  distribution  of  fertilizers  in  some  States  where  DBT system was introduced and if so, details, thereof;
- (c) the steps taken to address the issue; and
- (d) whether it is feasible to introduce DBT system for providing fertilizer subsidy to farmers and if so, the details thereof?

## ANSWER

MINISTER  OF  STATE  (INDEPENDENT  CHARGE)  FOR  THE    MINISTRY  OF PLANNING AND MINISTER OF STATE IN THE MINISTRY OF CHEMICAL AND FERTILIZERS

## (RAO INDERJIT SINGH)

(a): The Government has introduced Direct Benefit Transfer (DBT) system for fertilizer subsidy in a phase-wise manner across all States/UTs. Under the fertilizer DBT system, 100% subsidy on various fertilizer grades shall be released/is being released  to  the  fertilizer  companies,  on  the  basis  of  actual  sales  made  by  the retailers to the beneficiaries.  Sale of all subsidised fertilizers to farmers/buyers is being made through Point of Sale (PoS) devices installed at each retailer shop and the  beneficiaries  are  being  identified  through  Aadhaar  Card,  KCC,  Voter  Identity Card, etc.

Implementation of the DBT Scheme requires deployment of PoS devices at every  retailer  shop,  training  of  retailers  &  wholesalers  for  operating  PoS  device. Across  the  country,  Lead  Fertilizer  Supplier  (LFS)  has  conducted  4630  training sessions  till  date,  as  a  part  of  ongoing  PoS  deployment  and  as  a  precursor  to nation-wide rollout of DBT.  Approximately 1.8 lakh retailers were sensitized during the introductory training sessions conducted by LFS.  The schedule for phase-wise roll out of DBT is tabulated below:

| S. No                                                                           | Name of States / UT's                                       | GO Live Timeline   |
|---------------------------------------------------------------------------------|-------------------------------------------------------------|--------------------|
| 1                                                                               | NCT of Delhi live on DBT in fertilizers 1st September, 2017 |                    |
| Mizoram, Daman & Diu, Dadra Nagar Haveli, Manipur, Nagaland, Goa, Puducherry,   | 1st October, 2017                                           | 2                  |
| Rajasthan, Uttarakhand, Maharashtra, Andaman & Nicobar Islands, Assam, Tripura. | 1st November, 2017                                          | 3                  |
| AP, Haryana, Punjab, Chhattisgarh and MP                                        | 1st December,2017                                           | 4                  |
| Kerala, Bihar, Karnataka, Jharkhand, Telangana, and TN                          | 1st January, 2018                                           | 5                  |
| UP, Gujarat, WB, Odisha and Himachal Pradesh                                    | 1st February, 2018                                          | 6                  |
| 7                                                                               | Jammu &Kashmir 1st March, 2018                              |                    |

(b): No, Madam. The sale of all subsidised fertilizers to farmers/buyers is being made through Point of Sale (PoS) devices installed at each retailer shop and the beneficiaries are being identified through Aadhaar Card, KCC, Voter Identity Card etc.  In case, any beneficiary is not having Aadhaar Card, he/she is still being sold the fertilizer at subsidised cost on production of Kisan Credit Card or Voter Identity Card, along with his Aadhaar Enrolment number.

(c): Does not arise in view of (b) above.

(d): The  Government has introduced  Direct  Benefit  Transfer  (DBT)  system  for fertilizer  subsidy  in  a  phase-wise  manner  across  all  States/UTs.  Under  the  DBT scheme,  the  subsidy  will  be  released  to  the  fertilizer  companies,  instead  of beneficiaries, after the sale is made by the retailers to the beneficiaries. At present, direct  transfer of  subsidy  to  beneficiaries  like  in LPG  cannot  be  introduced  in  the fertilizer  sector  as  the  beneficiaries  and  their  entitlements  are  not clearly  defined. Multiple  subsidized  products,  urea  and  21  grades  of  Phosphatic  &  Potassic fertilizers  have  different  subsidy  rates.    In  the  case  of  urea  subsidy  varies  from company to company due to different production processes, energy efficiencies of plants, vintage etc. Amount of subsidy in some fertilizers particularly Urea is more than double the MRP.  It will be a huge financial burden on the farmers' pocket, to pay  the  MRP  and  subsidy  upfront  and  receive  the  subsidy  amount  in  his  bank account subsequently.  However, Niti Aayog has recently set up a committee for indepth analysis  of  the  issue  and  to  recommend  a  model  that  could  be  used  for direct transfer of subsidy to the farmers.

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