Govt mulls smart cards for fertiliser subsidy payout

The government plans to issue smart cards to millions of farmers so that they can be given subsidy directly under the Nutrient-Based Subsidy (NBS) policy.

The Department of Fertilisers (DoF), under the chemicals and fertilisers ministry, would first initiate a pilot project in six to seven states to track the movement of fertilisers by enlisting farmers who use those.

At present, the government keeps a record of the movement till the first point of sale by manufacturers in retail outlets. However, DoF now plans to track the movements till the end user so that the government can create a database of farmers who can be given subsidy directly.

“Through the pilot project, we will be able to track and enlist farmers in the country to be able to give them subsidies. Based on the success of the project, we would issue them smart cards with their particulars. These would also be issued to temporary land tenants and tillers so that no one is deprived,” a DoF official told Business Standard.

The smart card would have details like the name of the farmer, his village and district, among other things, and would be available for Rs 100. These would be distributed through kiosks and centres set up in villages with the help of service providers.

DoF also plans to tie up with the government’s unique identification (UID) number once it gets implemented.

“We have to evolve a strategy where we will determine sales to actual consumers. We want each transaction to be recorded online to avoid leakages,” the official said.

DoF is already in consultation with the agriculture ministry and state governments for this. A regional state government official would also be appointed to enlist farmers and monitor the subsidy payout.

The NBS policy was brought into effect from April 1, 2010, to lessen the subsidy burden of the government by decontrolling prices of macronutrients like Nitrogen (N), Phosphorous (P) and Potassium (K); secondary nutrients like Sulphur (S); and micronutrients such as Zinc (Zn) and Boron (B).

The revenue foregone towards fertiliser subsidy payout in 2009-10 stood at Rs 8,010 crore, which was 3.22 per cent of the total revenue forgone. Compared to this, revenue forgone on fertliser subsidy in 2008-09 stood at Rs 14,200 crore, 6.3 per cent of the total forgone revenue in the financial year.