The Government is likely to direct transfer fertiliser subsidy to farmers, bypassing retailers.
This move is because of the mounting pressure on it to control its rising fiscal deficit and the subsidy outgo.
An indication to this effect came in the deposition of a top Fertiliser Ministry official before the Parliament's Standing Committee on Chemicals and Fertilisers.
Task force proposal
The move is at variance with the initial recommendations of a task force headed by Mr Nandan Nilekani, Chairman, Unique ID Authority.
The task force had suggested a three-stage shift, starting with first transferring the subsidy to manufacturers, then to retailers and, finally, the farmers.
The first stage of transfer is already operational.
The Secretary to the Department of Fertilisers told the Standing Committee that based on internal discussions and experience, “we have concluded that subject to approval by the task force, there will be no need for retail subsidy in stage II.
Today, we are giving subsidy to manufacturers. We will try to go to stage III, where farmers will get the subsidy.”
Timeframe
Asked about the time frame, he said that to go to stage III it will take more than one year, as all recipients (the farmers) would be required to have an Aadhar (UID) number.
This submission was part of the Standing Committee's report that was tabled in Parliament on Wednesday.
Earlier, in stage II, it was envisaged that subsidy would be released to retailers when they receive the fertiliser at the final point of sale.
In stage III, subsidy was to be transferred to intended beneficiaries once the Aadhar numbers were given and the Aadhar-enabled payment gateways put in place.
The Nilekani headed UID has been entrusted with the task of providing 60 crore Aadhar numbers by 2014.