Column : Missing links in the fertiliser subsidy scheme

Under the extant dispensation, 85-90% of the subsidy amount (fixed amount on DAP and NP/NPK fertilisers and excess of cost over controlled MRP for urea) is paid to manufacturer on ‘receipt of material in district’.

From November 2012, producers are to get subsidy payments only on confirmation of ‘receipt of fertiliser by the retailer’. Actual payments are, however, stuck as the department of fertilisers (DoF) has no money, having exhausted allocated funds. In the mid-year economic analysis of 2012-13, the finance ministry came out with a blueprint on the modalities for implementing the Budget announcement. Pilot projects in 10 districts spread over nine states will be launched.

After successful implementation in these 10 districts, cash subsidy will be transferred to farmers in the next phase from April 1, 2013. Concurrently, tracking the movement of fertilisers will be rolled out in the whole country. The DoF has developed a mobile and web application, a mobile Fertiliser Monitoring System (m-FMS) that provides information about stock position, sale and receipt of fertiliser till the last retail point.

A group headed by Nandan Nilekani had mooted a system by which the government would credit the subsidy to the account of the dealer even as the latter pays the market-based price to the manufacturers and sells to farmers at a subsidised price. Before

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