Author: Jagdish Kumar, India
With a view to check that subsidy is going to its right farmers, Narmada Valley Fertilizers & Chemicals Limited (GNFC) has become the first company in the country to use Blockchain technology for fertilizer subsidy management.
The company along with India’s planning authority, The National Institution for Transforming India (NITI), also called NITI Ayog have signed a statement of intent (SOI) to work together towards implementing a Proof-of-Concept (PoC) application using Blockchain technology recently.
Under the agreement, both NITI Ayog and GNFC will jointly develop the use case, under take research, interact with multiple stakeholders, develop Blockchain solutions, exchange learnings, organise forums, and disseminate learnings across their networks. Learnings, insights and outcomes of the PoC will enable NITI Ayog to suggest policy recommendations and actions in strengthening the subsidy mechanism, making it more transparent and immune to leakages.
Fertilizer units manufacture approximately 31 million metric tonnes of fertilizers across country, where total approximately $1.05 billion (INR 700 billion) of subsidy is disbursed to the manufacturing units.
The subsidy disbursal takes two to three months’ time. There are multiple entities involved in verification process, and the transaction process is very cumbersome which has the potential to be automated to give significant efficiency gains, the NITI Ayog said in a statement.
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.
Blockchain platform have inherent characteristics of distributed computing and ledger keeping of transactions i.e. 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.
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.
Image Credit: Express Computers