New Delhi, February 21, 2017

DBT for kerosene subsidy may have to wait till next fiscal

Moving ahead with reforms for better targeting of subsidies and plugging leakages, the government plans to roll out direct benefit transfer for fertiliser subsidy from June 30 across the country.

“As of now, DBT for fertiliser subsidy is planned to be rolled out in all districts from June 30. But it will be given at the producer’s end,” said a senior official close to the development.

According to the plan, the fertiliser subsidy will be given to the producer after capturing the Aadhaar number through a point of sale machine of the farmer when he purchases a bag of fertiliser. The difference between the actual value and the subsidised price of fertiliser will then be transferred to the producer’s bank account.

“Aadhaar will authenticate the identity of the farmer and ensure that the subsidised fertiliser is used by the intended beneficiary,” said the official.

Further, the nutrient mix in the fertiliser will be based on the report of the soil health card of the farmer.

The Centre had last year conducted pilot projects for DBT in kerosene in 16 districts as well as in two districts of Andhra Pradesh.

Sources said the results show that direct cash transfer of fertiliser subsidy along with neem coating urea and soil health cards can lead to significant savings.

Though the Union Budget 2017-18 has been largely silent on its ambitious DBT programme, government officials have said that efforts are on to expand its scope. This would not only lower the subsidy bill but also weed out fake beneficiaries.

For 2017-18, the Centre has kept the fertiliser subsidy unchanged at Rs.70,000 crore while the overall subsidy bill has increased to Rs.2.4 lakh crore from Rs.2.32 lakh crore last fiscal.
Kerosene subsidy

However, DBT for kerosene subsidy may have to wait till next fiscal by when the entire food subsidy will be rolled out completely. “The situation for kerosene subsidy will be assessed then,” said a source.

At present, the government is hoping that the roll out of the Ujjwala scheme that seeks to provide subsidised cooking gas connections to below poverty line families and move towards becoming kerosene free, will be more effective for targeting beneficiaries.

“We have made a strong beginning with regard to DBT to LPG and kerosene consumers,” Jaitley had said in the Budget, adding that Chandigarh and eight districts of Haryana have become kerosene free.

[The Hindu Business Line]