Direct Benefit Transfer (DBT) System in Fertilizer Section

Direct Benefit Transfer (DBT) System in Fertilizer Section

Narendra Modi Government has launched a very beneficial scheme for the Fertilizer Segment. The scheme is Direct Benefit Transfer or DBT System. The new scheme is centralized on direct benefit transfer (DBT) system for payment of fertilizer subsidy to farmers of the country.

Under the scheme

  • Rs 70,000 crore fertilizer subsidy budgeted for 2017-18 will be disbursed to companies based on actual sales to farmers captured on point-of-sale (POS) machines installed at nearly two lac retail points across India.
  • The proposed subsidy post sale system as opposed to after receipt at district or dispatch from a plant is already being implemented as a pilot scheme in 17 districts.

Advantage of the scheme

  • This system’s biggest advantage is that it can track actual purchases by the final buyer.
  • A farmer growing wheat or rice may apply up to three 50 kg bags of urea, one bag of di-ammonium phosphate (DAP) and half-a-bag of muriate of potash (MOP) per acre.
  • Narendra Modi government had promised to clear fertilizer subsidy arrears, estimated at about Rs 40,000 crore at the earliest and also increase the fixed cost of urea in order to strengthen the industry.

The Minister informed that the pilot project to introduce DBT in Fertilizer Sector has been undertaken in 16 districts as given below:


S.No. District State
1. Una Himachal Pradesh
2. Kishanganj Bihar
3. Hoshangabad Madhya Pradesh
4. Karnal Haryana
5. Kurukshetra
6. Kannur Kerala
7. Nasik Maharashtra
8. Raigarh
9. Tumkur Karnataka
10. Rangareddy Telengana
11. Krishna Andhra Pradesh
12. West Godavari
13. Maldah West Bengal
14. South 24 paraganas
15. Narmada Gujarat
16. Pali Rajasthan

With banks flushed with money after demonetization of Rs 500 and Rs 1,000 notes, Fertilizer Minister Ananth Kumar said the government was looking at providing loans to the industry at a reasonable rate through special banking arrangement.

Fertilizer manufacturers have to acquire an additional interest cost of Rs 4,000 crore per annum due to delay in subsidy payment by the government. The government had allocated around Rs 70,000 crore in this year budget for payment of fertilizer subsidy and the same has already been used up.

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