Lok Sabha Question No. 2203 (UNSTARRED), answered on 2016-11-29
Subject: Direct Transfer of Fertilizer Subsidy
Ministry: CHEMICALS AND FERTILIZERS
Asked by: RAHUL RAMESH SHEWALE, SHRIKANT EKNATH SHINDE, RAKSHA NIKHIL KHADSE, R. VANAROJA, KIRRON KHER

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS

## DEPARTMENT OF FERTILIZERS

## LOK SABHA

UNSTARRED QUESTION NO. 2203

TO BE ANSWERED ON :

29.11.2016

Direct Transfer of Fertilizer Subsidy

## 2203   SHRI RAHUL SHEWALE:

DR. SHRIKANT EKNATH SHINDE:

SHRIMATI RAKSHTAI KHADSE:

SHRIMATI VANAROJA R:

SHRIMATI KIRRON KHER:

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

- (a) whether the Government is considering direct transfer of fertilizer subsidy to farmers and a comprehensive reform package in the fertilizer subsidy to address the problems leakages and skewed mix of fertilizer use as well as diversion and smuggling of urea;
- (b) if so, the details thereof;
- (c) whether  the  Government  has  made  any  assessment  regarding  the  savings  if  the Government comes out with Direct benefit Transfer(DBT) to provide fertilizer subsidy directly to all the farmers in the country.
- (d) if so, the details thereof;
- (e) whether it is true that the Government is facing a challenge for the implementation of DBT as 50 per cent of the farmers are not land owner; and
- (f) if so, the details thereof and  the plan prepared  for solving this issues  and implementation of DBT in the country?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND FERTILIZERS, SHIPPING, ROAD TRANSPORT & HIGHWAYS

## ( SHRI MANSUKH L. MANDAVIYA)

(a) & (b):   Yes, Madam. The Government has decided to introduce Direct Benefit Transfer (DBT) system for fertilizer subsidy payments.  Under the proposed system, 100% subsidy on  various  fertilizer  grades  shall  be  released  to  the  manufacturers  and  importers  on  the basis of actual sales made by the retailer to the beneficiaries. Initially, the modified subsidy procedure under DBT system will be introduced on pilot basis in 16 select districts and after its due stabilization, the new payment system would be rolled out in all states in the second phase. The proposed DBT will address the issues  relating  to  diversion  and  smuggling  of urea.

(c) & (d):   The DBT being implemented in fertilizer subsidy payment is slightly different from the normal DBT being implemented in LPG subsidy.  Under the DBT in fertilizer sector, the subsidy will be released to the fertilizer companies instead of the beneficiaries, after the sale is made by the retailers to the beneficiaries on submission of claims generated in the webbased online Integrated  Fertilizer  Monitoring  System  (iFMS)  by  fertilizer  companies.  After implementation of DBT, it is expected that diversion/smuggling of fertilizers will be reduced to  a  large  extent  and  the  Government  will  save  subsidy  to  the  that  extent.  However,  no assessment has been made to calculate the savings.

(e) & (f):        The proposed DBT for release of fertilizer subsidy to fertilizer companies has no direct relation with landholding of the farmers.  The fertilizers will be available to all on 'no denial' basis.

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