Direct Benefit Transfer Fertilizer
Earlier the government had announced that it would introduce a Direct Benefit Transfer (DBT) system under which it would provide cash to the bank accounts of the farmers to purchase fertilizers. However upon the implementation of the scheme it has been noted that this is not what the government is providing.
In fact, there are a series of other things that have been listed. What are those things? Let’s find out.
Important things to note about DBT
- The basic aim of the scheme was to provide 100% subsidy on the various subsidy grades. This amount will be released based on the actual amount that they have to pay to the retailers and the manufacturers.
- Also currently the main issue of the state is that there is a lot of illegal smuggling of urea. This type of smuggling and illegal selling and buying will be addressed under this new subsidy scheme.
- It must be noted that the main plot of this program is to release the subsidy to the manufacturers instead of the beneficiaries of the program.
- The scheme is expected to curb the illegal supply of fertilizers. It is also expected that since the illegal supply of the fertilizers will be stopped, some amount will be saved by the government too. hence some part of the subsidy will be regained.
- Even though it is still not known how much the government savings would be if the diversion is stopped, it is expected to know that the farmers will be greatly benefitted if the fertilizers are available at cheaper costs.
- It must also be noted that this scheme is not tied to landholding by any means. The application of this scheme will be for all farmers without any denial to anyone.
How can the fertilizer companies obtain this subsidy?
The companies will have to visit the online portal of the fertilizer monitoring and enter their details. Once they have sold their products and the final purchase has been made by the farmers, they can apply for this subsidy at the portal claiming their sales.
The web portal that is catering to the needs of the manufacturers for this purpose is the Integrated Fertilizer Monitoring System (iFMS). After the retailers make the sale to the beneficiaries or the farmers, they will have to submit the claims of such a transaction on this web portal, upon which their claims will be granted.
How is it different from LPG subsidy?
On the occasion of the similarity between the schemes, many people have drawn the conclusion that these two schemes will be similar. However that is not the case. In case of LPG subsidy scheme the government transferred the entire amount to the account of the bank account holders.
But in case of fertilizers the subsidy components are much higher than that of cooking gas that only takes about Rs. 1600 per month. Also there are about 140 million farmers around the country. This is why the government has thought it best that the companies that manufacture be paid the subsidies at the initial stage. This way the costs across all the stages can be covered for the farmer.
Also this way the farmer will no longer have to pay the entire amount upfront in large numbers because it has to be purchased in large quantities.