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Govt to evaluate fertilizer subsidy schemes; may incorporate changes to enhance effectiveness

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The Development Monitoring and Evaluation Office ( DMEO), under the NITI Aayog, plans to undertake the evaluation of urea subsidy and nutrient based subsidy schemes which together cost the exchequer in excess of Rs 1,77,000 crore in 2024-25.

The aim is to assess the relevance, efficiency, effectiveness, sustainability, impact, coherence, and equity of the schemes with the Urea Subsidy scheme in operation since 1977 while the Nutrient Based Subsidy Scheme has been in place since 2010.

DMEO has invited bids from national as well as international technical consultants to support the evaluation of the two schemes. The findings of the evaluation are expected to help the government introduce necessary interventions, wherever needed, to improve the effectiveness of the schemes.


“The study will assess the long-term fiscal sustainability of the current subsidy outgo under various fertilizer subsidy schemes,” it said in the request for proposal (RFP) document floated for the purpose.

The reference period for primary research will be from 2022-23 to 2024-25 and the evaluation study is expected to be completed in five months of the award of the study.

“The study is expected to assess the availability and accessibility of an adequate quantity of fertilizers at a statutory controlled price, analyze the impact of its usage on production and assess regional variations in uptake of the scheme,” DMEO said.

Besides, it will also analyse trends in the present level of fertiliser production and identify challenges in increasing indigenous production including availability of raw material, it said.

As per the document, the study will analyse how existing policies, pricing regimes, and subsidy structures influence competitiveness of the sector including the operational efficiency of the existing direct benefit transfer (DBT) mechanism.

“The study will assess incentives and the regulatory environment needed to promote fresh investment and new and innovative fertilizers for greater and efficient output,” it added.
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