New Delhi: Political sensitivity is likely to push the issue of direct fertiliser subsidy to farmers to the backburner when the matter comes up for discussion before a Group of Ministers early next week.
The GoM consisting of Agriculture Minister Sharad Pawar, Fertiliser Minister Ram Vilas Paswan and Finance Minister P Chidambaram has been set up to explore ways of sustainable use of fertiliser besides deciding on pricing and subsidies.
According to official sources, the government is not in favour of doing away with indirect fertiliser subsidy to companies though there would be intense discussions on the pros and cons of direct subsidy during the meeting.
It is also being argued that direct fertiliser subsidy would not bring down the government assistance from the current level of Rs43,000 crore annually and instead other ways should be explored for the purpose.
“There is a feeling that the purpose of reducing the subsidy will not be served through its direct distribution to farmer,” sources said.
The total subsidy during the current financial year including the last year’s arrears of Rs8,082 crore is estimated at over Rs51,000 crore.
Indian Farmers Fertiliser Cooperative Ltd’s (IFFCO) proposal for its involvement in the process of distribution of subsidy directly to farmers would also be considered during the meeting.
IFFCO has also prepared a mechanism — Radio Frequency Identification Device — in which the farmer would just require to swipe a smart card through the reader terminal of a bank and get the subsidy amount directly credited to his account.
Finance Minister P Chidambaram had said in his budget speech that while fertilisers should indeed be subsidised, “we must find an alternative method of delivering the subsidy directly to the farmer”.
The fertiliser industry has agreed to work with the Department of Fertilisers to conduct a study and find a solution, Chidambaram had said, adding that based on the report government intends to implement a pilot programme in at least one district in each state in 2007-08.
The issue of gas pricing and nutrient based subsidy will also come up for discussions during the meeting.