Fertilizer Sector reforms – NBS, bio-fertilizers, Neem coating, etc.

[pib] NITI Aayog partners with GNFC Ltd to implement Fertilizer Subsidy Disbursement through Blockchain Technology


Mains Paper 3: Agriculture | Issues related to direct & indirect farm subsidies & minimum support prices

From UPSC perspective, the following things are important:

Prelims level: Application of Blockchain Technology

Mains level: Use of Blockchain Technology in transferring Fertilizer Subsidy and its benefits.


Use of Blockchain Technology (BCT) in Subsidy Disbursement

  1. NITI Aayog and Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC) have signed a Statement of Intent (SOI) today to work towards implementing a Proof-of-Concept (“PoC”) application using Blockchain Technology for fertilizer subsidy management.
  2. They will jointly develop the use case, undertake research, interact with multiple stakeholders, develop Blockchain solutions, exchange learnings, organize forums, and disseminate learnings across their networks.
  3. This will enable NITI Aayog to suggest policy recommendations and actions in strengthening the subsidy mechanism, making it more transparent and immune to leakages.

Present Fertiliser situation in the country

  1. Fertilizer units manufacture approximately 31 Million MT of fertilizers across country, where total approximately Rs. 70,000 Cr. of subsidy is disbursed to the manufacturing units.
  2. The subsidy disbursal takes two to three months’ time.
  3. There are multiple entities involved in the verification process, and the transaction process is very cumbersome which has the potential to be automated to give significant efficiency gains.

How would Blockchain Technology help?

  1. Blockchain platform has inherent characteristics of distributed computing and ledger keeping of transactions i.e. confidentiality, authenticity, non-repudiation, data integrity, and data availability.
  2. Overall implementation ensures that there is no dependence on intermediary agencies to prove the validity of transactions and resulting subsidy claims.
  3. The blockchain based process will also use Smart Contracts which will enable quick and accurate reconciliation of transactions between multiple parties with minimal human intervention.
  4. Implementation platform is such that process transparency is evident, transactions cannot be altered and audit trails of transactions are available.
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