3. Introduction
⢠Nitrogen (N), Potash (K), Phosphorous (P),
Calcium (Ca), Magnesium (Mg) and Sulphur(S)
are macronutrient of the soil. Fertilizers are
used to reduce their deficiency.
⢠Farmers find it unaffordable to pay the
market price for the fertilizers, thus
government gives subsidy for it.
⢠Fertiliser subsidy is the 2nd largest
component of the total subsidy after food
subsidy.
⢠The government estimated Rs 79,996 crore in
fertilizer subsidy this year budget.
4. How the system has changed?
Older System
Initial 85% -90% payment
(95% in Urea) is released
to manufacturer on
receipt of fertilizers at
the district level. The
balance 10%-15% (5% in
Urea) is released on the
confirmation of receipt
by retailers in mobile
Fertilizer Monitoring
System, âmFMSâ.
New System
100% payment of subsidy
to manufacturing
companies on the basis of
actual sales by the retailer
to the beneficiary. Sale of
all subsidised fertilizers to
farmers/buyers will be
made through Point of
Sale (PoS) devices installed
at each retailer shop.
5. Other Features of New system
⢠The farmer or buyerâs identity is authenticated either through
Aadhar based biometric authentication or Voter ID Card or Kisan
Credit Card.
⢠Aadhar based biometric authentication is preferred as this is
linked to land records and the soil health card of the farmer.
⢠The sale of fertilizers would initially be on a âno denial modeâ.
⢠All the Fertilizer sale transactions are captured online in the
Integrated Fertilizer Management System (iFMS) system on real
time basis.
⢠The claims will be processed on weekly basis and subsidy will be
remitted to the companyâs bank account through electronic
mode.
6. Implementation
⢠Pilot project started initially with 17 districts in different
states and gradually implemented to whole country.
⢠âProject Monitoring Cellâ - to oversee implementation of
DBT exclusively.
⢠24 State Coordinators - to monitor the on-going DBT
activities.
⢠Dedicated 15-member Multi-lingual Help Desk - to quickly
respond to all typed of queries.
⢠Organising about 4,500 training sessions across India.
7. Success of Pilot
⢠NITI Aayog findings:
â Increased Aadhaar authentication strike rate i.e. more
than 99%.
â Transaction time improved: to less than 3 minutes for
51% and between 3-5 minutes for 33% of the
respondents.
â Grievance redress mechanism has improved; and
⢠Alleged instances of overcharging by retailers have
come down.
8. Benefits Expected
⢠Making transaction digital: Increased transparency.
⢠Beneficiary (farmer) driven subsidy mechanism.
⢠Aadhaar seeded database: detecting âGhost
beneficiaryâ.
⢠Minimizing illegal diversion of fertilizer for non-
agriculture applications.
⢠Better soil health management: Appropriate mix of
fertilizers compatible to the soil health profile of the
agricultural land.
9. ⢠Quick subsidy payments to Companies.
⢠It will plug leakages and save huge amount of
money to the exchequer.
⢠Generating data on the usage of the nutrients.
Through this, the right Use Ratio (like 4:2:1 for
NPK) can be implemented.
⢠This will automatically cover all small and
marginal farmers.
10. How DBT in Fertiliser is different from other types
of DBT?
⢠DBT in MGNREGA: Payment of wages directly to
beneficiariesâ bank account.
⢠DBT in PAHAL: Consumers receive LPG subsidy for 12
cylinders a year in their bank account. People earning more
than Rs.10 lakh a year would not be eligible for the LPG
subsidy.
⢠DBT in Kerosene: Beneficiaries purchase kerosene and
subsidy is transferred directly to their bank account.
⢠DBT in Fertiliser: The fertilizer subsidy will be released to
the fertilizer companies instead of Farmers.
11. Why Subsidy is not directly transferred to Farmers
Bank Account?
⢠Many farmers lack capacity to pay large amounts upfront.
⢠Difficulty in calculating the amount of subsidy:
â Exact amount of subsidy required by farmers.
â Cost of production for Urea is different for each fertiliser
company.
⢠Case of DBT in Kerosene:
â Misuse of Kerosene like it is used to adulterate diesel;
â Poor Banking system in rural areas;
â All farmers do not have banking account;
â Possibility of misuse of cash.
12. Issues with New System
⢠Issues such as biometric mismatch (like fingerprints),
authentication failure, server downtime and power and
internet connectivity.
⢠Around 60% retailers reported issues while serving
customers during the peak season.
⢠Dealer attrition: Due to declining margins; requirement of
higher working capital and more staff etc.
⢠Different subsidy rate for each company.
⢠Companies claimed that payment of subsidies is not timely.
13. Way Forward
⢠Improve the quality PoS machines with long term battery.
⢠Supply of gloves along with fertiliser bags â for better
fingerprint authentication and to protect skin of farmers.
⢠Creating awareness among farmers: Use of local languages,
user friendly videos etc.
⢠Reducing the waiting time especially during peak season.
⢠Subsidy directly to the bank account.
⢠Sustainable Agriculture and Organic Farming: Over usage of
fertilizer is a bigger challenge than subsidy.
14. Fertiliser DBT 2.0
⢠It targets transfer of fertiliser subsidy directly to
farmers' bank accounts.
⢠For this, 3 steps have been initiated on 10 July, 2019:
â a dashboard with details of fertiliser supply, availability
and requirement at national, state and district level;
â advanced version of point of sale (PoS) software, a multi-
lingual facility with a provision for Aadhar virtual
identification option; and
â a desktop PoS version.