Urea Subsidy Scheme Extended Till 2020 – DBT Scheme for Fertilizer Subsidy to Farmers

Published Date - 16 March 2018 03:50:22 Updated Date - 16 March 2018 03:51:11

Central government has decided to extend the Urea Subsidy Scheme till FY 2020. The government on Tuesday decided to implement direct benefit transfer (DBT) for fertilizer subsidy payments across India, seeking to prevent diversion of fertilizers for commercial use and generate data on the usage of the nutrients to help farmers. Subsequently, this fertilizer dbt scheme will provide direct benefit transfer of fertilizer subsidy to farmers. Accordingly, this dbt in fertilizers will ensure direct urea subsidy transfer and fertilizer subsidy directly to farmers. Moreover, govt. will provide dbt for fertilisers to assure supply of subsidized urea under fertilizer dbt rollout.

Urea is made available to farmers at a statutorily controlled price of Rs 5,360 per tonne. The difference between the delivered cost of the fertiliser at farm gate and maximum retail price is given as subsidy to manufacturers. Urea subsidy is projected to be Rs 45,000 crore for 2018-19, compared with Rs 42,748 crore this year. The urea subsidy has been extended for three years till 2020 at a total estimated cost of Rs 1.64 lakh crore, the statement added. Normally, the ministry of chemicals and fertilisers takes approval for the urea subsidy subsidy on an yearly basis. This time it has received clearance for three years.

The Cabinet Committee on Economic Affairs CCEA also approved implementation of direct benefit transfer (DBT) for disbursement of fertiliser subsidy in order to reduce diversion and plug the leakages. In the statement, the government said it is in the process to roll out DBT in fertiliser sector nationwide. DBT would entail 100 percent payment to fertiliser companies. The primary focus of govt. is on making dbt in fertilisers work and to provide adequate quantity of urea to farmers at low prices.

Urea Subsidy Scheme / DBT in Fertilizer Subsidy to Farmers

The important features of this direct benefit transfer of fertilizer subsidy are as follows:-

  • Direct Urea Subsidy Transfer Scheme will enable farmers to purchase urea at subsidized price of Rs. 5,360 / tonne.
  • Subsequently, govt. will provide difference in the delivered cost of the fertiliser at farm gate and maximum retail price (MRP) as subsidy to manufacturers.
  • Accordingly, central govt. will spend Rs. 1.64 lakh crore in the next 3 years. Previously, Ministry of Chemicals and fertilizers needs to take clearance for every year. This time it got clearance for 3 years.
  • CCEA also approves implementation of Direct Benefit Transfer – dbt in fertilizer subsidy to properly disburse fertilizer subsidy directly to farmers.
  • This direct benefit transfer of fertilizer subsidy will reduce diversion and also plug the leakages.
  • Moreover, govt. is planning for nationwide fertilizer dbt rollout to provide dbt for fertilisers.
  • Further, DBT in fertilizers will ensure 100% payment to fertilizers companies for making dbt in fertilisers work under fertilizer dbt scheme.

This continuation of Urea Subsidy Scheme will bring fertilizer subsidy reforms to ensure supply of fertilizer subsidy to farmers.


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