The move assumes significance as Maharashtra and Haryana, with a huge farmer vote bank, are headed for polls next month.
The move assumes significance as Maharashtra and Haryana, with a huge farmer vote bank, are headed for polls next month.

Govt to weigh plan to transfer fertilizer subsidy to farmers via e-wallets

  • The development assumes significance as Maharashtra and Haryana, with a huge farmer vote bank, are headed for assembly elections scheduled next month
  • The Reserve Bank of India (RBI)-backed National Payments Corp. of India (NPCI) is currently working on the facility of creating the e-wallet

Consistent with the promise to help farmers, the Prime Minister’s Office (PMO) on Wednesday will hold a meeting to mull over fast-tracking the disbursal of fertilizer subsidies through e-wallets. The meeting, which will be chaired by the principal secretary to the Prime Minister, P.K. Mishra, will be attended by top officials from the department of fertilizer, department of financial services and ministry of agriculture, a senior government official said, requesting anonymity.

The development assumes significance as Maharashtra and Haryana, with a huge farmer vote bank, are headed for assembly elections scheduled next month. Indian farmers have been a stressed lot over the past few years, battling weak rains, floods and falling commodity prices. The National Democratic Alliance (NDA) government at the Centre has been trying to implement several measures to protect farmers, including the roll-out of the direct income transfer scheme earlier this year. Besides, Prime Minister Narendra Modi has repeatedly said the government aims to double farmers’ income by 2022.

“The fertilizer subsidy will be directly transferred by the government to the farmer’s e-wallet," the official cited above said, adding that an e-wallet will be made available with the Rupay Kisan Card.

The Reserve Bank of India (RBI)-backed National Payments Corp. of India (NPCI) is currently working on the facility of creating the e-wallet. “All banks are likely to complete required steps needed to link e-wallet to the Kisan card in a month or two," he said, adding the facility should be rolled out before the end of this year.

Last year, the government had introduced a system of giving out the fertilizer subsidy to manufacturers only after they furnished receipts of actual sales to farmers registered on point-of-sale (PoS) machines. Now the government will use the direct benefit transfer (DBT) mode to transfer the subsidy amount through e-wallets.

The Centre has budgeted 79,996 crore for the current financial year, towards giving out fertilizer subsidy, which includes urea and nutrient-based subsidy. In 2018-19, the subsidy outgo was 70,085 crore and in 2017-18 it was 66,467 crore.

So far in 2019-20, the government has transferred as much as 92,145 crore through DBT, out of which 28,901 crore was given out as fertilizer subsidy. The government has claimed to have saved 51,664.85 crore in 2018-19 through direct transfer of subsidies to genuine beneficiaries.

“There has been a deliberate attempt by the Union government to find ways to directly transfer subsidies in the bank accounts of beneficiaries. The first step in this direction was Jan Dhan Yojana, through which bank accounts were opened for the financially and socially weaker sections of the society. Apart from the administrative step, this decision will also give political mileage to the Bharatiya Janata Party (BJP)- led NDA in the election season. Direct transfer of subsidies is not just more efficient but it will also limit corruption. People may find newer ways for corruption but the older ways of corruption may not feasible because of direct benefit transfer," said Abhay Kumar Dubey, a New Delhi-based political analyst and associated with the Centre for Study of Developing Societies.

Gyan Verma contributed to this story

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