Central Govt Looking At DBT, Improved Targeting To Save Fertiliser Subsidy Bill

The central government is looking at improved targeting to save its fertilizer subsidy expenditure, Financial Express reports.

One of the options being explored upon is to allow over 14 crore beneficiaries to purchase the fertilisers at market rates. The centre will then transfer the subsidy to their Aadhar-linked bank accounts.

The amount of the subsidy will be decided on a per acre basis. There will be no cap of landholding for the same.

The other possible alternative is to provide subsidised fertilisers to farmers or deposit the subsidy in cash to their bank accounts. However, this particular provision will be subject to a landholding limit.

The farmer will be denied the subsidy for the land above the eligibility threshold if their holding turns out to be higher than the limit.

At present, the government provides periodic subsidies to fertiliser manufacturers. These are done on the basis of Aadhaar- authenticated sales via point of sale (PoS) machines. Implemented from 1^st April 2018 onwards, this mechanism enabled the central government to save Rs 10,000 crore in fertiliser subsidy by plugging leakages in FY19.

Rating agency ICRA has reportedly estimated that India’s fertiliser subsidy will increase by over 50 per cent than the Budget estimate of Rs 1.5 lakh crore for FY23.