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From June, fertiliser companies to get subsidy after PoS retail sale

LiveMint logoLiveMint 03-04-2017 PTI

New Delhi: Moving a step closer to introduce direct benefit of transfer (DBT) in fertiliser sector, the government has decided to pay from June onwards fertiliser subsidy to manufacturers only after sale of soil nutrients via point of sale (PoS) devices at retail level.

The move will help reduce the government’s fertiliser subsidy bill by up to 20% through plugging diversion and leakages. The Centre has provided over Rs70,000 crore for subsidy payment for this fiscal.

At present, the subsidy is paid to manufacturers after they submit receipt-at-district or dispatch-from-plant.

“From the kharif season of this year, the subsidy will be transferred to the company the moment fertiliser gets sold via the point of sale (PoS) machines,” fertiliser secretary Bharathi Sivaswami Sihag told PTI.

The government has decided to introduce this system from June this year in a phased manner after the success of its pilot study ‘DBT in fertiliser sector’ conducted in 17 districts across the country.

The new fertiliser subsidy payment would be slightly different from the normal DBT being implemented in LPG subsidy.

However, in case of DBT in the fertiliser sector, the subsidy will be released to the fertiliser companies instead of the beneficiaries, after the sale is made by the retailers to the beneficiaries via PoS machines.

The government has asked companies to install PoS machines by 31 May at 2 lakh-odd registered retail outlets so that the new system subsidy payment starts from June.

On benefits of this system, the secretary said, “We will have a complete track of the consumption pattern. It will be linked with soil health card and land record in next 3 years. So, when farmers come to buy fertiliser, he will be told what combination of nutrients he should buy given soil condition.”

This will also help in curbing diversion of fertilisers and reduce subsidy burden by 10-20%, a senior fertiliser ministry official said.

Elaborating more on the new system, the official said that fertiliser will be sold after identifying the beneficiary farmers through Aadhaar-based biometric authentication, voter ID or Kisan Credit Card.

The sale transaction as well as buyer details would be captured in the PoS machine installed at the retailer’s end and connected with a central server, he said.

Asked if companies are comfortable with this new system, the official said, “They may have issues, but we are paying subsidy, so they have to listen to us. If they want subsidy, they have to follow the system.”

The companies will have to bear the installation cost of PoS devices. In fact, they can spend the fund Rs50 per tonne that the government gives them to acknowledge the sale receipts.

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