The Department of Fertilizers with the technical support of National Informatics Centre (NIC) is following the phased approach for direct transfer of subsidies for fertilizers in the following manner:
I. Phase I: Information visibility till the retailer’s level where part subsidy is disbursed to the manufacturers on the basis of the information of retail acknowledgements reported in mFMS.
II. Phase II: Part subsidy payment to the manufacturers on the basis of the information of retailer sales of fertilizers captured in mFMS.
III. Phase III: Subsidy payment to the farmer on the basis of fertilizer sales made to him/her.
IV. Phase IV: Subsidy payment to the farmer as per his entitlement on the basis of details of sales made to him/her
Phase I has been made operational from November 2012.
It has been decided to conduct a Pilot of Phase II (To capture the retailer sales of fertilizers to farmers) before its implementation across the country. 12 Districts across 11 States have been selected for the Phase II pilot based on Aadhaar penetration, fertilizer consumption, geographical variance, dealer network etc. The pilot is to be launched by April 2013.
In the subsequent phases of the project, the mechanism to transfer subsidy directly to the intended beneficiaries (Farmer) will be formulated and implemented once the implementation of Phase I & II are stabilized.
A Task Force under the Chairmanship of Sh. Nandan Nilekani, Chairman, UIDAI, was set up by the Government to suggest an implementable solution for the transfer of direct subsidy in fertilizers, LPG and kerosene to the farmer. The mandate of the Task Force was to recommend and implement a mechanism for transfer of direct subsidy including, inter-alia, to identify and suggest the required changes in the existing systems, processes and procedures, IT frameworks and supply chain management. The Task Force is also to oversee and evaluate the implementation of the solutions proposed on pilot based through the concerned implementing Ministries.