Direct benefit transfer (DBT) of fertilizer subsidy – issues and related aspects

This study attempts to review, examine and analyses the present status of direct benefit transfer (DBT) of fertilizer subsidy in India from secondary sources of information. DBT on fertilizers came into force in 2016 on pilot basis in some States. In this system, subsidy on fertilizer will be directly deposited into the bank account of the buyers after purchasing from point of sale (PoS) which should be authenticated by Bandhan-Aadhar-Mobile (JAM). It was expected that DBT could reduce pilferage of Government's social and economic expenditure on social aspect and help saving (1st year saving by ¹ 30000 cores.). A study of NITY Aayog (2018) found that 79% of fertilizer retailers and majority of farmers are satisfied with DBT. However, the success of the scheme will depend on resolution of some key issues such as connectivity and dealer's margins.