Immediate action required to straighten flawed fertiliser subsidy mechanism in the country, study

Immediate governmental actions like expanding infrastructure, issue the licences to new retailers and an efficient grievance redressal system required to straighten the flawed fertiliser subsidy mechanism in the country, says a study by consulting company MicroSave. MicroSave’s study backs up the governmenrt’s move to initiate the payment of subsidy to fertiliser companies on the basis of actual sales to farmers. Earlier, the process would start once companies produced documents showing dispatch of fertiliser to district headquarters.

The new decision will be implemented from kharif season, which is set to begin by May-June. Till the last rabi season, companies were paid the subsidy after farmers purchased fertilisers post Aadhar identification. This mode was activated in a pilot basis in 16 districts across 11 states. The officials also hinted at a direct transfer mechanism of subsidy to the farmers as in LPG subsidy.

The government’s decision to change the contour of giving fertiliser subsidy to companies on actual sales made to farmers through point of sale (PoS) devices is aimed at streamlining the Rs 70,000-crore annual subsidy it gives to the sector. The government also wants to prevent malpractices like over-invoicing, plug leakages and diversion. The government had launched pilot programmes in 14 districts across Himachal Pradesh, Bihar, Madhya Pradesh, Haryana, Kerala, Maharashtra, Karnataka, Telangana, Andhra Pradesh, Gujarat, and Rajasthan.

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