Niti Aayog and GNFC are exploring Blockchain technology for fertiliser subsidy management: Here’s how
With implementation of Blockchain Technology, it is expected that the distribution will become effective and efficient, and subsidy transfer could be automated and made real time, said Niti Aayog. (Photo: Agency)

Central government’s think-tank, NITI Aayog and Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC) are exploring Blockchain technology for efficient management of fertiliser subsidy. Both the organisations have signed a Statement of Intent (SOI) to work together towards implementing a Proof-of-Concept (PoC) application using Blockchain Technology for fertiliser subsidy management, said a statement.

Under this agreement, they will jointly develop the use case, undertake research, interact with multiple stakeholders, develop Blockchain solutions, exchange learnings, organise forums, and disseminate learnings across their networks, said Niti Aayog. Both the organisations also claimed that learnings, insights and outcomes of the PoC will enable NITI Aayog to suggest policy recommendations and actions in strengthening the subsidy mechanism, making it more transparent and immune to leakages.

According to GNFC, fertilizer units manufacture approximately 31 million MT of fertilizers across India and about Rs. 70,000 crore of subsidy is disbursed to the manufacturing units. The subsidy disbursal takes two to three months’ time. “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,” said GNFC.
With the implementation of Blockchain Technology, it is expected that the distribution will become effective and efficient, and subsidy transfer could be automated and made real time, said Niti Aayog.

According to technology experts, Blockchain platform has inherent characteristics of distributed computing and ledger keeping of transactions – confidentiality, authenticity, non-repudiation, data integrity, and data availability. Overall implementation ensures that there is no dependence on intermediary agencies to prove the validity of transactions and resulting subsidy claims.

GNFC said that 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. Implementation platform is such that process transparency is evident, transactions cannot be altered and audit trails of transactions are available.

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