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LATEST NEWS UPDATES | Govt's ambitious fertilizer subsidy reform plan -R Sree Ram </title>
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Overall, while the government is trying to reform the fertilizer subsidy payment mechanism, the challenge is to make sure the new system works before implementation
Union minister for chemicals and fertilizers Ananth Kumar’s ambitious plan to clear the fertilizer subsidy backlog..."/>
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Overall, while the government is trying to reform the fertilizer subsidy payment mechanism, the challenge is to make sure the new system works before implementation
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<h1 class="cat-box-title">Govt's ambitious fertilizer subsidy reform plan -R Sree Ram</h1>
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<div align="justify">-Livemint.com<br /><br /><em>Overall, while the government is trying to reform the fertilizer subsidy payment mechanism, the challenge is to make sure the new system works before implementation<br /></em><br />Union minister for chemicals and fertilizers Ananth Kumar’s ambitious plan to clear the fertilizer subsidy backlog before the implementation of the direct benefit transfer (DBT) scheme next fiscal year (FY19) has come as surprise to many.<br /><br />The huge subsidy backlog (estimated at Rs35,000 crore as of FY17) has been the source of much financial discontent for the industry. Payment delays worsened the working capital situation for many, raising finance costs and crimping profits. In this backdrop, the minister’s statement has not only come as a surprise but is also viewed by many with some scepticism.<br /><br />First, estimates of the quantum of subsidy backlog vary greatly. The minister puts the current subsidy backlog at Rs23,000 crore whereas industry body Fertiliser Association of India pegs the current fiscal year (FY18) subsidy backlog at Rs30,000 crore.<br /><br />According to a person associated with the industry, the subsidy backlog has come down this year due to a reduction in raw material costs. But he doubts if the subsidy backlog will be as low as the figure the minister is alluding to as raw material prices have rebounded again.<br /><br />Even then, with the budgeted subsidy for a fiscal year usually exhausted in the first eight months of the year itself, the government will have to seek a supplementary grant to clear the subsidy backlog, a tough task given the constraints in FY18.<br /><br />Secondly, the message implied in the minister’s statement is implementation of DBT next year (the plan is to clear the subsidy backlog before the implementation of DBT), which again is a grey area. Pilot projects and studies show huge infrastructure constraints at the retailer’s end.<br /><br />“Fertiliser retailers are worried that transactions authenticated through PoS (point of sale) may not be feasible during upcoming peak ‘Kharif’ season due to high transaction time. Assuming 5 minutes per transaction time and 10 hours of operation; retailers can only handle 120 transactions in a day, which is insufficient to handle rush of 300-500 farmers per day during peak periods,” says an assessment report on the Aadhaar-enabled fertilizer distribution system (pilot project).<br /><br />Please <a href="http://www.livemint.com/Money/IVyg2joVMuKGkQGw7TJwJJ/Govts-ambitious-fertilizer-subsidy-reform-plan.html" title="http://www.livemint.com/Money/IVyg2joVMuKGkQGw7TJwJJ/Govts-ambitious-fertilizer-subsidy-reform-plan.html">click here</a> to read more. <br /></div>
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LATEST NEWS UPDATES | Govt's ambitious fertilizer subsidy reform plan -R Sree Ram </title>
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Overall, while the government is trying to reform the fertilizer subsidy payment mechanism, the challenge is to make sure the new system works before implementation
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<h1 class="cat-box-title">Govt's ambitious fertilizer subsidy reform plan -R Sree Ram</h1>
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<div align="justify">-Livemint.com<br /><br /><em>Overall, while the government is trying to reform the fertilizer subsidy payment mechanism, the challenge is to make sure the new system works before implementation<br /></em><br />Union minister for chemicals and fertilizers Ananth Kumar’s ambitious plan to clear the fertilizer subsidy backlog before the implementation of the direct benefit transfer (DBT) scheme next fiscal year (FY19) has come as surprise to many.<br /><br />The huge subsidy backlog (estimated at Rs35,000 crore as of FY17) has been the source of much financial discontent for the industry. Payment delays worsened the working capital situation for many, raising finance costs and crimping profits. In this backdrop, the minister’s statement has not only come as a surprise but is also viewed by many with some scepticism.<br /><br />First, estimates of the quantum of subsidy backlog vary greatly. The minister puts the current subsidy backlog at Rs23,000 crore whereas industry body Fertiliser Association of India pegs the current fiscal year (FY18) subsidy backlog at Rs30,000 crore.<br /><br />According to a person associated with the industry, the subsidy backlog has come down this year due to a reduction in raw material costs. But he doubts if the subsidy backlog will be as low as the figure the minister is alluding to as raw material prices have rebounded again.<br /><br />Even then, with the budgeted subsidy for a fiscal year usually exhausted in the first eight months of the year itself, the government will have to seek a supplementary grant to clear the subsidy backlog, a tough task given the constraints in FY18.<br /><br />Secondly, the message implied in the minister’s statement is implementation of DBT next year (the plan is to clear the subsidy backlog before the implementation of DBT), which again is a grey area. Pilot projects and studies show huge infrastructure constraints at the retailer’s end.<br /><br />“Fertiliser retailers are worried that transactions authenticated through PoS (point of sale) may not be feasible during upcoming peak ‘Kharif’ season due to high transaction time. Assuming 5 minutes per transaction time and 10 hours of operation; retailers can only handle 120 transactions in a day, which is insufficient to handle rush of 300-500 farmers per day during peak periods,” says an assessment report on the Aadhaar-enabled fertilizer distribution system (pilot project).<br /><br />Please <a href="http://www.livemint.com/Money/IVyg2joVMuKGkQGw7TJwJJ/Govts-ambitious-fertilizer-subsidy-reform-plan.html" title="http://www.livemint.com/Money/IVyg2joVMuKGkQGw7TJwJJ/Govts-ambitious-fertilizer-subsidy-reform-plan.html">click here</a> to read more. <br /></div>
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LATEST NEWS UPDATES | Govt's ambitious fertilizer subsidy reform plan -R Sree Ram </title>
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<h1 class="cat-box-title">Govt's ambitious fertilizer subsidy reform plan -R Sree Ram</h1>
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<div align="justify">-Livemint.com<br /><br /><em>Overall, while the government is trying to reform the fertilizer subsidy payment mechanism, the challenge is to make sure the new system works before implementation<br /></em><br />Union minister for chemicals and fertilizers Ananth Kumar’s ambitious plan to clear the fertilizer subsidy backlog before the implementation of the direct benefit transfer (DBT) scheme next fiscal year (FY19) has come as surprise to many.<br /><br />The huge subsidy backlog (estimated at Rs35,000 crore as of FY17) has been the source of much financial discontent for the industry. Payment delays worsened the working capital situation for many, raising finance costs and crimping profits. In this backdrop, the minister’s statement has not only come as a surprise but is also viewed by many with some scepticism.<br /><br />First, estimates of the quantum of subsidy backlog vary greatly. The minister puts the current subsidy backlog at Rs23,000 crore whereas industry body Fertiliser Association of India pegs the current fiscal year (FY18) subsidy backlog at Rs30,000 crore.<br /><br />According to a person associated with the industry, the subsidy backlog has come down this year due to a reduction in raw material costs. But he doubts if the subsidy backlog will be as low as the figure the minister is alluding to as raw material prices have rebounded again.<br /><br />Even then, with the budgeted subsidy for a fiscal year usually exhausted in the first eight months of the year itself, the government will have to seek a supplementary grant to clear the subsidy backlog, a tough task given the constraints in FY18.<br /><br />Secondly, the message implied in the minister’s statement is implementation of DBT next year (the plan is to clear the subsidy backlog before the implementation of DBT), which again is a grey area. Pilot projects and studies show huge infrastructure constraints at the retailer’s end.<br /><br />“Fertiliser retailers are worried that transactions authenticated through PoS (point of sale) may not be feasible during upcoming peak ‘Kharif’ season due to high transaction time. Assuming 5 minutes per transaction time and 10 hours of operation; retailers can only handle 120 transactions in a day, which is insufficient to handle rush of 300-500 farmers per day during peak periods,” says an assessment report on the Aadhaar-enabled fertilizer distribution system (pilot project).<br /><br />Please <a href="http://www.livemint.com/Money/IVyg2joVMuKGkQGw7TJwJJ/Govts-ambitious-fertilizer-subsidy-reform-plan.html" title="http://www.livemint.com/Money/IVyg2joVMuKGkQGw7TJwJJ/Govts-ambitious-fertilizer-subsidy-reform-plan.html">click here</a> to read more. <br /></div>
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Govt's ambitious fertilizer subsidy reform plan -R Sree Ram
Published on Dec 20, 2017
Modified on Dec 20, 2017
-Livemint.com
Overall, while the government is trying to reform the fertilizer subsidy payment mechanism, the challenge is to make sure the new system works before implementation
Union minister for chemicals and fertilizers Ananth Kumar’s ambitious plan to clear the fertilizer subsidy backlog before the implementation of the direct benefit transfer (DBT) scheme next fiscal year (FY19) has come as surprise to many.
The huge subsidy backlog (estimated at Rs35,000 crore as of FY17) has been the source of much financial discontent for the industry. Payment delays worsened the working capital situation for many, raising finance costs and crimping profits. In this backdrop, the minister’s statement has not only come as a surprise but is also viewed by many with some scepticism.
First, estimates of the quantum of subsidy backlog vary greatly. The minister puts the current subsidy backlog at Rs23,000 crore whereas industry body Fertiliser Association of India pegs the current fiscal year (FY18) subsidy backlog at Rs30,000 crore.
According to a person associated with the industry, the subsidy backlog has come down this year due to a reduction in raw material costs. But he doubts if the subsidy backlog will be as low as the figure the minister is alluding to as raw material prices have rebounded again.
Even then, with the budgeted subsidy for a fiscal year usually exhausted in the first eight months of the year itself, the government will have to seek a supplementary grant to clear the subsidy backlog, a tough task given the constraints in FY18.
Secondly, the message implied in the minister’s statement is implementation of DBT next year (the plan is to clear the subsidy backlog before the implementation of DBT), which again is a grey area. Pilot projects and studies show huge infrastructure constraints at the retailer’s end.
“Fertiliser retailers are worried that transactions authenticated through PoS (point of sale) may not be feasible during upcoming peak ‘Kharif’ season due to high transaction time. Assuming 5 minutes per transaction time and 10 hours of operation; retailers can only handle 120 transactions in a day, which is insufficient to handle rush of 300-500 farmers per day during peak periods,” says an assessment report on the Aadhaar-enabled fertilizer distribution system (pilot project).
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