Centre for Development Economics
Department of Economics
Delhi School of Economics
ANNOUNCE A SEMINAR
Direct Benefit Transfer in Fertilizer Subsidies and Its impact on Agricultural Productivity: Evidence from Plot-Level Data in India
by
(IISER Bhopal)
(Thursday, November 27, 2025, at 3:10 PM, IST )
Venue: Amex Room
Abstract:-
Fertilizer subsidy in India is large accounting for 0.65% of GDP in the year 2021-22. However, fertilizers, particularly urea, have been prone to leakages through large-scale diversion towards non-agriculture or industrial purposes causing acute shortage of urea in the farm sector and adversely affecting the crop yield and agricultural productivity. In order to curb leakages, the Government of India introduced Direct Benefit Transfer in fertilizer (DBT-F) in October 2016 in a few pilot districts, which was later implemented throughout the country. Using detailed plot level data on input usage and output produced for wheat growing farmers, we find that the introduction of DBT-F led to an increase in crop yield and profits. While we observe an increase in usage of potassium (K) fertilizer, we do not find an increase in consumption of Nitrogen (N) and Phosphorus fertilizers. We conjecture that introduction of DBT-F might have led to timely availability of fertilizer or / and higher quality of fertilizer that might have played a significant role in increasing the yield as well as profit margins.