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Direct Benefit Transfer for Fertilizers: A pros and cons analysis

By Finserv MARKETS - Nov 29,2019
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Direct Benefit Transfer for Fertilizers: A Pros & Cons analysis

The Indian Government launched the Direct Benefit Transfer or DBT scheme in 2013, in a bid to allow the transfer of subsidies directly to the bank accounts of beneficiaries. The scheme was aimed at increasing the transparency of these transfers and to reduce farmers’ dependence on middlemen for receiving their dues. With recent moves by the Government to encourage universal access to banking, this scheme looks poised for success. However, there has been much debate on whether the scheme has been successful or not, and whether it should be applied for other products as well such as fertilizers.

Along with easier facilitation of DBT, universal access to banking has also made it easier for farmers and planters to avail farm loans. It is now possible to avail personal loans on Finserv MARKETS and have the amount credited to your account within 24 hours. You can apply for personal loans online, and get up to Rs. 25 lakh which can be repaid over a flexible tenure stretching from 12 to 60 months. The best personal loans in India can help you greatly in your agricultural enterprise.

Direct Benefit Transfer for Fertilizers: A Pros & Cons analysis
The infographic above shows the process involved in DBT for LPG cylinders, which has been implemented for a while now. With intensive debates raging on the effectiveness of DBT for fertilizers, there are several arguments advocating its use and against it. Read on to get an idea of the raging debate, and its pros and cons.


  • With the subsidies being directly credited to the bank accounts of beneficiaries, middlemen will be eliminated allowing for increased prosperity for farmers. Despite the number of advancements in the country’s agricultural sector, farmers continue to live in abject poverty in many states owing to a lack of knowledge regarding the benefits accessible by them.
  • The linking of Aadhaar cards to bank accounts will allow for the elimination of duplicate and fake accounts, and allow the actual beneficiaries to receive the benefits due to them.
  • Operational costs will reduce for the Government, owing to the elimination of middlemen and also phasing out of fair price shops. This will aid the Indian economy’s growth in the long run.
  • With this transparency and accessibility to benefits, the market will witness healthy competition by sellers.
  • The Indian Government has long been pushing for a cashless economy, through moves such as demonetisation which saw increased utilisation of new-age payment wallets. The DBT scheme is expected to be a step forward in facilitating a cashless economy in the rural areas of the country as well, with transfers being made directly to bank accounts of beneficiaries. The increasing use of bank accounts in rural areas will also enable farmers and planters to seek farm loans. You can access a personal loan through Finserv MARKETS, and get access to up to Rs. 25 lakh which is directly credited to your bank account. Apply for personal loans online today, and minimise the amount of paperwork involved for availing the best personal loans in India.


  • The infrastructure required to pull this scheme off successfully continues to be lacking in India, with many rural areas lacking basic banking and road connectivity.
  • Even today, many people continue to avoid paying income tax. This will be a hurdle the government needs to overcome in order to identify deserving beneficiaries for the subsidies.
  • A lack of awareness among deserving beneficiaries is bound to create problems for the successful implementation of this scheme. Especially in rural areas, farmers may lack the basic awareness that they are entitled to these benefits thereby resulting in them suffering losses and the Government being unable to help them.
  • The lack of infrastructure stretches to include micro ATMs as well, which were to be set up in different areas to allow farmers to directly withdraw their benefits in cash. However, these ATMs are yet to be set up in many areas; and their absence will result in farmers being unable to withdraw their money. Or worse, farmers and planters will be forced to travel long distances to access their funds.
  • With direct cash being transferred to beneficiaries, the funds may not be used for the intended purposes. Most farmer families are headed by men from the village, who could use the funds to pay for their vices including alcohol and tobacco. This will be a waste of the Government’s resources, and will also not help India’s farming community.

It is clear that the Direct Benefit Transfer scheme could transform into significant benefits for the farmers and everybody else involved. However, it is also clear that there is still a lot of work yet to be completed by the government before this scheme can achieve fulfillment.

Even in preliminary stages, though, the scheme has definitely aided the government’s aim of universal banking for all, with many villagers now opening up bank accounts. With this development, it has now become much easier for those wishing to avail farm loans from the rural areas of the country. The best personal loans in India are available on Finserv MARKETS, and you can apply for personal loans without having to put up any collateral. The loan can be repaid over a flexible tenure of 12 to 60 months, thereby allowing you a comfortable time frame to use the funds to meet operations. To experience a hassle free loan application experience, download our personal loan app today! As you got to know the benefits of personal loan learn how to get a personal loan from Finserv MARKETS

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