Central government will expand the scope of its successful direct benefit transfer (DBT) scheme to provide food and fertilizer subsidies directly into the accounts of beneficiaries, Expenditure Secretary Girish Chandra Murmu said.
The DBT being implemented in fertilizer subsidy payment is slightly different from the normal DBT being used in LPG subsidy. Under the DBT in fertilizer sector, the subsidy is released to the fertilizer companies instead of the beneficiary farmers after the sale is made by the retailers to the farmers.
Murmu said that a true DBT system where the subsidy is directly provided into the accounts of farmer beneficiaries would be kick-started this year.
“After the launch of PM Kisan scheme, farmer data is authenticated with Aadhaar and (bank) accounts are seeded. This would make it possible to use this data to disburse fertilizer subsidy directly into the accounts of beneficiaries,” Murmu told IANS.
Fertilizer subsidy can be given directly to farmers using the data on land holdings, soil health card, etc in a gradual manner.
He also hinted that farmer data under PM Kisan scheme may also be used for initiating DBT for disbursing food subsidies. Under PM Kisan, around 14.5 crore farmers will get Rs 6,000 per year directly into their bank accounts.
“If we do targeted benefit there might be savings on total subsidy outgo as well,” the Expenditure Secretary said suggesting though that subsidies as percentage of GDP has remained constant at 1.4-1.5 per cent.
On an absolute basis, the subsidy bill on food, fertilizer and fuel is estimated to go up by 13.32 per cent to Rs 3,01,694 crore in FY20.
Direct transfer of subsidy to beneficiaries could not be introduced in fertilizer sector earlier, as the beneficiaries and their entitlement was not clearly defined. Multiple subsidized products, urea and 21 grades of phosphatic & potassic fertilizers have different subsidy rates. But with clear identification of beneficiary, this problem is expected to be resolved.
The fertilizer subsidy is projected to increased by 14.14 per cent to Rs 79,996 crore in 2019-20 from the revised estimate of Rs 70,085.70 crore in the last fiscal.
Apart from fertilizer, the government plans to initiate DBT also for disbursing food as well as power subsidies. A mechanism is being worked out for that. It is expected that, based on the inputs coming from one full year operation of PM Kisan scheme. further action on DBT plan would be taken.