Pan India DBT Rollout in Fertilizers

1. Pan India DBT Rollout in Fertilizers DBT in Fertilizers implementation in States Presentation on 16th Feb. 2017 Department of Fertilizers

2. Background Hon’ble Finance Minister in Budget Speech for 2016-17 announced: “…. introduce DBT on Pilot basis for fertilizers in few districts …....” Decisions taken in PMO on 12th March 2016: • Project to be started on a pilot basis. • A committee headed by CEO, NITI Aayog to recommend and finalize modalities. Highlights of Meeting at NITI Aayog on 28th Mar 2016: • Pilot Project in 16 Districts. • 8 Districts each in Rabi 2016. • 8 Districts each in Kharif 2017.

3. Traditional DBT model The key elements of traditional DBT model (E.g. in LPG) are: Beneficiaries and their entitlements are defined. Beneficiary is identified on the basis of Aadhaar authentication. After Aadhaar authentication, subsidized entitlements are sold to beneficiary at market price. Subsidy amount is transferred to the beneficiary after sale transaction.

4. Challenges & Complexities of implementing traditional DBT in Fertilizers DBT in Fertilizers is much more complex than DBT in other schemes. • Beneficiary is not defined. (Presently being sold on no denial basis.) • Beneficiary entitlement is not defined. • Subsidy amount is more than twice of subsidized price. • Moving MRP to Market Price will cause huge burden on farmers. (As they would be required to pay market price upfront.) • Multiple products (Urea, P&K etc) have varied subsidy amounts. • Subsidy component varies plant / Company wise even for the same product.

5. Subsidy for Urea manufactured by NFL Moving the MRP to Market Price would mean that Urea of Same Company but from different plants would have to be sold at different prices.

6. Proposed DBT Model in Fertilizers • Selling price will not be moved to market price, unlike LPG. (Farmer will not be required to pay market price upfront.) • Farmer are identified on the basis of Aadhaar/ EPIC/ KCC. • Fertilizers are sold at subsidized MRP, and subsidy amount is paid by the Government on behalf of farmer, directly to the manufacturer. • As of now subsidy is paid to the manufacturer on basis of “receipt at Districts/Retailers”. • As per the proposed model the subsidy will be paid based on “actual sales” captured on PoS device. • Subsidy to manufacturer will be paid on weekly basis.

7. DBT Process Flow : Linkage with Soil Health & land Records • Farmer is identified on basis of Aadhaar authentication, Voter ID or KCC. • Using Aadhaar, Land and Soil Health details are fetched. • Recommendation on type and quantity of fertilizers isgenerated. (Farmer however, takes final decision.) • System indicates amount to be paid by the farmer and subsidy to be paid by Government on his behalf. • Farmer pays only subsidized MRP. • Post purchase, a SMS is sent to farmer.

8. DBT Process Flow Retailer login with Aadhaar Bio Auth or Mobile OTP Auth Buyers visits Retailer Demographic records are captured using e-KYC Buyer shares his Aadhaar NO NO Buyer shares mobile number of any family member Buyer shares Voter ID or KCC and is advised to enroll for Aadhaar YES UIDAI Buyer shares his Mobile YES Demographic details are entered Recommendations from Land records and Soil Health card (SHC) Sale Completed Sale transaction details are entered Back

9. Key Stakeholders • State Governments (Agriculture Department) • District Administration • Fertilizer Companies (LFS) • Technology Partner (NIC) • Owner (DoF) 1 5 Dept of Fertilizers State Governments Stakeholders 2 District Administration NIC 4 Fertilizer Companies • The success of pilot will depend on close coordination among all stakeholders, • robust monitoring and evaluation mechanism, and setting up of a professional team. 3

10. List of Pilot Districts * Three additional districts were included in Pilot phase on 27th January, 2017.

11. Existing Payment Process • Companies become eligible for payment as soon as quantity is received in the Districts. • Company submits bills on basis of receipts at districts. The bill is signed by company representative and CA. 95% (Urea) subsidy and 85-90% (P&K) subsidy is released within 2 months. • Remaining 5% (Urea) subsidy and 10-15% (P&K) subsidy is released after (a) retailer’s acknowledgement on mFMS and (b) issuance of B1 and B2 certificates from state Government.

12. Re-engineered Payment Process • Estimate the monthly expenditure Head Wise for Pilot Districts on the basis of Supply Plan of the previous month with a variation (+/- 10%). • Approval of Competent Authority to be taken for estimated Monthly expenditure, in concurrence with IFD (Advance Sanction). • Fertilizers sale transactions to be captured online using Biometric Authentication. • On 8th, 16th, 24th and last day of the month, company Representative to generate bills head wise on the basis of actual sale. Weekly bills to be digitally signed and uploaded in iFMS. • On next day, Bills received to be processed and the claims added to be digitally signed by DDO .

13. Re-engineered Payment Process (contd..) • DDO will issue a digital sanction for the admitted claim amount. • Once the digital sanction is received, PAO will pass the payment through PFMS. • PFMS Will give records to iFMS for the payments made. • System will generate weekly /monthly expenditure statements for the company and concerned departments. • On 20th of every month the Concerned Division (Urea & P & K) will initiate the process of reconciliation and recoup Heads and prepare estimated requirement for next month. • This process has been approved by CGA.

14. Information to be captured at PoS device If Aadhaar number is available, the buyer will be authenticated through UIDAI with e-KYC service. Mobile number is mandatory. If mobile number is not available, the buyer will be asked to share mobile number of his family member. Sale Information Buyer Information • Information captured by Retailer • Buyer Name-M • Father’s name-M • Mobile Number-M • Aadhaar Number-M/O • Voter/KCC-M/O • Address-O • Land details- O • Soil Health Card –O • Type of Fertilizers-M • Quantity of Fertilizers-M • MRP of Fertilizers-M • Name of the Plant-M • Name of the company-M M- Mandatory O- Optional

15. Present Status: DBT Rollout in pilot districts

16. Transaction Summary of Pilot District

17. Sale Transaction Details of Pilot Districts * The status is for 6 pilot districts live as on 31st Jan. 2017

18. Stakeholders Responsibility

19. Role of State Agriculture Department • State DBT Co-ordination & Monitoring Committee consisting of Principal Secretary Agriculture , Principal Secretary Revenue, LFS and State coordinator need to be constituted. • Close monitoring of POS Deployment. • Licenses to only those retailers who agree to sell through POS device and updating of retailers list. • Sensitization of Farmers : POS sales, SHC recommendation. • Expedite issue of Soil Health Card : out of 13.99 Corers, only 5.12 Crores SHC distributed (35.87%) ( SHC scheme website status on 14/2/17). • Updating of SHC data base and data sharing between SHC server and iFMS server.

20. Role of State Governments & District Collectors • State & District Collectors have key Role in DBT Implementation. • Preparatory Activities: • To ensure 100% Aadhaar penetration in DBT districts. •  Seeding of Aadhaar number in soil health card data base. • Seeding of Aadhaar in Land Record Database. • Prepare District Soil profiles where Aadhaar penetration is not 100%. • Contd./

21. Role of State Governments & District Collectors (Contd.) • Role of States During Implementation: • Training of retailers – District-wise training need to be organized. • To ensure that dealer’s list uploaded on iFMS is latest/correct. • Stock position at company warehouse and retailers need to be updated correctly. •  Setting up grievance redressal mechanism.

22. Role of District / Block Agricultural Officer • Constitution of “DBT working group” comprising of all stakeholders at District Level. • Block Agricultural Officers to have login id and password for mfms.nic.in. • Dealers & retailers (mFMS ID details) should be mapped /assigned to Block Agricultural Officers to ensure better monitoring . • While conducting physical verification of stock : • Check if stock tallies with stock shown in mFMS against that wholesaler ID • Ensure that stock value entered through POS devices are correct. • If any retailer reports change in opening stock ,District/ Block Agricultural Officers can update the correct opening stock once(Stock correction will be one-time activity.). • Ensure Physical stock = mFMS stock = Stock on ePoS. Contd./

23. Role of District / Block Agricultural Officer(Contd.) • Block Agricultural officer may physically need to verify the closing stock of all the retailers assigned to him prior to “GO LIVE” day in excel sheet / paper. Closing stock will be taken as per company, plant, product and retailer wise. • Template below may be used :

24. Roles and Responsibilities – Companies • Procurement of PoS devices/tablets and installation of application as per instructions issued by NIC. (http://mfms.nic.in/ ). • Deployment of PoS devices/tablets at retail points. • Depute a nodal officer for each district for coordination with District Administration. • Arrange district level workshops with retailers. • All sale transactions (Company to wholesaler or retailer) must be entered online on real time basis. • Sensitize the field officer in district regarding implementation of DBT. • Complete a network survey of all retail points for connectivity assessment. • Availability of Aadhaar for all retailers. • Coordination with device vendor and NIC to sort out hardware/software issues. • Periodic reporting to DoF and District Collector.

25. Responsibilities of NIC • Software development of iFMS, DBT (PoS Devices) •  Troubleshooting and Helpdesk Support • Proper Coordination with device vendors to sort out hardware/ software issues.  • software application or MIS on Key Performance Indicators.

26. PAN India Deployment of PoS Devices • Vide Cabinet decision dated 25th October, 2012, Rs. 50/MT was allowed for acknowledging the receipt of fertilizer through mFMS portal. • No action was taken by Fertilizer companies/Retailers to implement this decision. • In a workshop held on 16th September, 2016, it was made mandatory to acknowledge fertilizer receipt through PoS devices w.e.f. 1st January 2017.

27. PAN India Deployment of PoS Devices • Since no action was taken to install, date of deployment of PoS machines was extended by one month, i.e., upto 31st January, 2017 during workshop held on 11th November, 2016. • As companies failed to comply revised deadline, this deadline has been further extended to 31st May, 2017. • It has been clarified to companies that after 31st May, 2017, subsidy will be paid only on the quantity of fertilizer sold through PoS devices.

28. PAN India Deployment of PoS Devices • PoS deployment has to be completed by 31st May, 2017. • No Subsidies will be available/paid on the fertilizer sold without PoS after 31st May, 2017.

29. The Way Forward: Rollout of PoS Devices across all States • Steps Involved • Procurement of devices. • Total requirement in 35 States/UTs :175619 • In 19 States/UTs where PSUs are LFS :81080 • In 14 States/UTs where Pvt. Companies are LFS :94539 • Preparation of devices (Installation of software). • Training of Master for all states. (For Pilot states conducted & for other Trainers states training scheduled.) • District wise training of retailers. • Deployment of devices.

30. State wise PoS Requirement

31. Deployment of PoS devices – in states (19) covered by PSUs

32. Deployment of PoS devices – in states covered by Private Companies

33. Immediate Action required by States • Hold review meeting with LFS to review the status of procurement of PoS devices for the state. • Cost of Procurement is to be shared by all companies proportional to their Market share. • Companies can buy directly the devices proportional to their share or can provide funds to LFS • In case any company is neither procuring nor providing funds, LFS can procure the devices on their behalf and request DoF to recover the cost from the Subsidy Bills. * LFS – is the lead agency to coordinate procurement of devices.

34. Training of master Trainers/Retailers • Training of master Trainers - done for All states. • Training of retailers will have to be held district-wise. • States have key role in training Master trainers. • Full support of District Collectors, District Agriculture Officer , DIOs and State Government required for training and deployment of devices.

35. Thank You