Roadmap for fertiliser subsidy system soon

The government may soon come out with a "roadmap" for the implementation of a pilot programme to deliver the fertiliser subsidy directly to farmers, according to the mid-year review of the economy.

"The roadmap for implementation of the pilot programme is under consideration," says the review report.

The report has spelt out two options for reforms. First, policy steps which will affect the delivery system in general for a more focused targeting, and second, sector-specific initiatives.

"While a consensus needs to be evolved for sector-specific subsidies, changes in the delivery mechanism could be made immediately," the report said.

As a first step towards reforms in the delivery mechanism, the government might introduce multi-application smart cards (MASCs) for administering its various schemes, including subsidies, the report said. A working group set up by the Planning Commission has recommended use of such a smart card.

The cards are a technological breakthrough as they facilitate simplification of procedures and enhance efficacy. Based on a unique identity number, the smart card will make verification simpler once the records are digitised.

Along with such a smart card, the government is also considering setting up a web-enabled management information and public accountability system.

According to the plan, the subsidy-implementing agency will create a digital database of all beneficiaries and benefit-related characteristics. This information will be made accessible through the website of the agency. The benefits received by each beneficiary will be updated periodically.

The management information system will also be able to separate subsidies to suppliers like FCI and fertiliser companies from those to users like public distribution system households and farmers. The system will also have a database to give the exact subsidy to each producer and user.