Fixing delivery: on direct benefit transfer in fertilizers

Fixing delivery: on direct benefit transfer in fertilizers

Context:

Efficiencies of the Direct Benefit Transfer (DBT) in fertilisers would be increasingly visible as the pilot project expands to more states

About the project:

• In 2017, committee set up by NITI Aayog decided to roll out the pilot on DBT in fertilizers in 16 districts.
• Since then DBT in fertilizers has been rolled out in 19 States and Union Territories
• In another three months, DBT in fertilizers is expected to expand its footprint in the entire country.
• These initiatives have been supplemented with allied processes set in motion by the Department of Fertilizers including appointment of 24 State DBT co-coordinators, and organising about 4,500 training sessions across India.
• Training videos are also placed on YouTube, and the comprehensive redress system in place is being expanded to a multilingual help desk.

The process of Direct Benefit Transfer in fertilizers:

• Each time a farmer purchases fertilizers from a dealer, he/she presses his or her thumb at a point-of-sale (PoS) device and an authenticated receipt comes out giving details of the purchase and subsidy to be paid by the government directly to the manufacturer.
• The records of dealers are automatically updated and payment is made digitally or in cash

Advantages of DBT in Fertilisers

• Restricts diversion,
• Prevents leakages,
• Brings about greater transparency, accountability and efficiency

Challenges faced:

• An important issue had been connectivity. However, this has been addressed through flexibility in choosing the connectivity option (Wifi, LAN, PSTN) or use of external antenna to improve signal strength, other options have also been considered.
• Another important issue had been developing the systems and sensitising all stakeholders to migrate to the new system
• Currently, a major issue is of some dealer attrition, which is probably on account of declining margins and reduced possibility of diversion or sale at a higher price.

Surveys on pilot districts

• An independent evaluation agency appointed by NITI Aayog conducted two rounds of surveys of the pilot districts to get ground-level feedback.
• In the latest round 5,659 farmers and 427 retailers across 14 districts in addition to government officials and stakeholders in six States were surveyed

Findings:

• The Aadhaar authentication strike rate increased to as high as 97% in three attempts;
• 85% of farmers received transaction receipts, and
• 98% were charged the same amount as mentioned in the receipt;
• The grievance redress mechanism has improved and 79% retailers are satisfied
• Despite initial challenges, a majority of farmers (and retailers) prefer the DBT system.

Way ahead

• Innovative solutions such as making the application device agnostic so that retailers can use desktops, laptops, tablets, smartphones, etc. to run the application are expected to help.
• The revamped toll-free number which will soon allow conversations in regional languages is a boost.
• An important issue which needs to be addressed is reducing the waiting time for farmers purchasing fertilizers
• While Aadhaar is the preferred form of identification of buyers, other forms of identification may also be used.
• The broad and overriding goal should be to ensure that under no circumstances should any farmer be denied or refused the opportunity to purchase fertilizers.