Survey moots E-RUPI for fertiliser subsidy transfer to farmers

Pointing out that fertiliser administration reforms have been carried out in many countries, the Economic Survey said it is time for similar reforms in India, wherein the requirement is calculated based on standard norms and the quantity of subsidised fertiliser is fixed as per land records. It also recommended selling subsidised fertiliseronly to genuine farmers or their representatives.

However, the survey mentioned that it may be prudent to carry out pilot projects in one district each in a few states that have relatively robust and well-developed agri-stack systems, since fertiliser is a sensitive subject. Agri Stack is the digital foundation set up by the government to bring together various stakeholders to improve agriculture in India for improved outcome of schemes.

In India, fertiliser administration reforms involve a paradigm shift, the survey observed, adding that the future mode of fertiliser subsidy administration may be decided based on the results of the pilots.

Shortcomings

Currently the Centre pays subsidies to fertiliser companies based on the quantity of certain fertilisers sold to farmers, The survey has flagged some critical issues and recommended an alternative system.

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Shortcomings in the current subsidy regime include non-integration of point-of-sale (PoS) devices (at retail outlets) with land record data, non-verification of farmer as fertiliser sales are based on Aadhaar card, no quantity limit in sales, diversion of subsidised fertiliser for non-agriculture purposes, and overuse of subsidised crop nutrients creating health hazards.

Stressing that Agri Stack is now fairly well developed in the major states, the survey said it can provide the right tool for targeted fertiliser subsidy. “This (alternative) will ensure that subsidised fertilisers are sold to only those identified as farmers or authorised by the farmer, and the quantity of subsidised fertiliser is fixed based on parameters such as land ownership and prominent crops of the district (comprising at least 70 per cent of sown area in a season).

Seamless payment

“The parameters may be later refined based on crop grown and soil nutrient status (in convergence with the Soil Health card scheme and provisions may be made to provide top-up entitlement in case of crop damage or calamities caused by volatilities in weather conditions, in convergence with State disaster response fund (SDRF)/ National disaster response fund (NDRF),” it said.

The survey suggested that E-RUPI, a seamless one-time payment mechanism, can be utilised to provide the subsidy to the farmer directly. “The (proposed) system will ensure that the subsidy can only be used through registered PoS devices at authorised fertiliser outlets,” it said.

For instance, if a farmer buys less than his entitled quantity of fertilisers, the leftover subsidy in E-RUPI can be used to purchase other agricultural inputs like seeds and pesticides. Further, any unused subsidy at the end of the year can be converted into a small savings instrument at a post office.