Issue of DBT Scheme »

The Modi led central government is considering direct benefits transfer of fertilizer subsidy to farmers. Central government of India considering about if the urea subsidy could be provided directly to farmers through the direct benefits transfer scheme instead of the current policy of giving it to the producers. Although the issue of eligibility for farmers about the subsidy remained a sticking point. Till now the subsidy is paid to urea not to farmers directly but indirectly through producers and importers. Consensus continues to elude the centre on the politically sensitive reform of the urea sector, where it has accumulated that about Rs. 40000 cores an unpaid subsidy bill. Obviously the farmers expecting big bang announcement in the centre government budget 2015-2016 in regard to fertilizer reforms may have been disappointed. DBT is a revolutionary concept whose implementation will not only yield substantial saving in subsidy by curbing leakages but also end distortions in resource allocation and inefficiencies in supply chain germane to existing dispensation of subsidizing fertilizers through lower selling prices. But centre government needs to do lot of ground work before this is put in place. It is desirable that government should restrict subsidy payment only to small and marginal farmers. Towards this end, banks must seed data on holding size and income on the accounts under Jan Dhan Yojna. The government needs to cross another major hurdle before it can think of launching DBT. If subsidy has to be paid directly to the farmers, payment to manufactures will have to stop. The farmers of India interested in staling direct benefit transfer are giving all sorts of excuses. The main problem and hurdle of the implementation of DBT in fertilizer like urea because a significant part of cultivation is now a day done by tenant farmers or sharecroppers not owning the land and without any formal lease agreements. The opinion of PMI on this issue is that the benefits of DBT will be not justified without concerns of marginal farmers and sharecroppers will not be introduced.