Pan India DBT Rollout in Fertilizers DBT in

Pan India DBT Rollout in Fertilizers DBT in Fertilizers Workshop on 2 nd Feb. 2017 Department of Fertilizers

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 12 th March 2016: v Project to be started on a pilot basis. v A committee headed by CEO, NITI Aayog to recommend and finalize modalities. Highlights of Meeting at NITI Aayog on 28 th Mar 2016: v. Pilot Project in 16 Districts. i. 8 Districts each in Rabi 2016. ii. 8 Districts each in Kharif 2016. Department of Fertilizers Slide 2

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

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

Subsidy for Urea manufactured by NFL Plant Subsidized Price (MRP Rs /50 Kg Bag) Subsidy component ( Rs /50 Kg Bag) Market Price of Urea ( Rs /50 Kg Bag) Nangal 268 728 984 Panipat 268 659 916 Bathinda 268 572 829 Vijaipur-I 268 450 707 Vijaipur-II 268 407 663 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. Department of Fertilizers Slide 5

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

List of Pilot Districts S. No District State Aadhaar Saturation (%) No. of Retailers 1 Krishna Andhra Pradesh 99. 11 973 2 West Godavari Andhra Pradesh 101. 38 1100 3 Una Himachal Pradesh 111. 37 230 4 Hoshangabad Madhya Pradesh 104. 29 246 5 Pali Rajasthan 99. 59 343 6 Rangareddy Telangana 117. 66 205 7 8 9 10 11 12 13 14 15 16 17 18 19 Kishanganj Narmada Karnal Kurukshetra Tumkur Thrissur Nasik Raigarh Malda South 24 Parganas Begusarai* Dhanbad* Gorakhpur* Bihar Gujarat Haryana Karnataka Kerala Maharashtra West Bengal Bihar Jharkhand Uttar Pradesh 92. 82 91. 07 106. 87 106. 68 102. 02 103. 70 98. 44 97. 89 87. 07 94. 29 80. 28 94. 93 81. 93 Total 349 95 772 550 533 178 1346 200 800 1225 694 26 1488 11353 * Three additional districts were included in Pilot phase on 27 th January, 2017. Department of Fertilizers Slide 7

Existing Payment Process 1. Companies become eligible for payment as soon as quantity is received in the Districts. 2. 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. 3. Remaining 5% (Urea) subsidy and 10 -15% (P&K) subsidy is released after (a) retailer’s acknowledgement on m. FMS and (b) issuance of B 1 and B 2 certificates from state Government. Department of Fertilizers Slide 8

Re-engineered Payment Process Ø Estimate the monthly expenditure Head Wise for Pilot Districts on the basis of Supply Plan of the previous month with a variation (+/- 10%). Ø Approval of Competent Authority to be taken for estimated Monthly expenditure, in concurrence with IFD (Advance Sanction). Ø Fertilizers sale transactions to be captured online using Biometric Authentication. Ø On 8 th, 16 th, 24 th 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 i. FMS. Ø On next day, Bills received to be processed and the claims added to be digitally signed by DDO. Department of Fertilizers Slide 9

Re-engineered Payment Process (contd. . ) ØDDO will issue a digital sanction for the admitted claim amount. Ø Once the digital sanction is received, PAO will pass the payment through PFMS. ØPFMS Will give records to i. FMS for the payments made. ØSystem will generate weekly /monthly expenditure statements for the company and concerned departments. ØOn 20 th 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. Department of Fertilizers Slide 10

Expected outcomes of DBT 1. Significant impact on prevention on leakage and diversion. 2. Create Aadhaar seeded database of beneficiaries. 3. Transaction visibility at buyer level. 4. Subsidy transfer to manufacturer on the basis of actual sales. 5. Identify field level challenges both at the retailer and farmer level. 6. Infrastructure level challenges such as network connectivity and devices. 7. Acceptance levels (of retailer and farmer) towards technology intervention. 8. Capacity levels such as literacy levels (of retailers) to operate Po. S machine. Department of Fertilizers Slide 11

Key Stakeholders 1 1. 5 State Governments 2. District Administration Dept of Fertilizers 3. Fertilizer Companies (LFS) Stakeholders 4. Technology Partner (NIC) 5. Owner (Do. F) NIC Fertilizer Companies 2 4 District Administration 3 The success of pilot will depend on close coordination among all stakeholders, robust monitoring and evaluation mechanism, and setting up of a professional team. Department of Fertilizers Slide 12

Information to be captured at Po. S 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. Buyer Information Sale Information captured by Retailer q Buyer Name-M q Father’s name-M q Mobile Number-M q Aadhaar Number-M/O q Voter/KCC-M/O q Address-O q Land details- O q Soil Health Card –O q Type of Fertilizers-M q Quantity of Fertilizers. M q MRP of Fertilizers-M q Name of the Plant-M q Name of the company-M M- Mandatory O- Optional Department of Fertilizers Slide 13

DBT Rollout in pilot districts: Status Sr. District No Retailers / Po. S Received / Master Required Deployed Training DBT Status 1 Krishna (AP) 973/973 Completed Live (1 st Oct 16) 2 West Godavari (AP) 1100/1100 Completed Live (1 st Oct 16) 3 Una (HP) 230/221 Completed Live (1 st Jan 17) 4 Hoshangabad (MP) 246 217/214 Completed Live (1 st Jan 17) 5 Pali (Rajasthan) 343/270 Completed Live (1 st Jan 17) 6 Rangareddy (Telangana) 205/184 Completed Live (1 st Jan 17) 7 Kishanganj (Bihar) 349 344/308 Completed Live (1 st Feb 17) 8 Karnal (HR) 772/590 Completed Live (1 st Feb 17) 9 Kurukshetra (HR) 550 520/332 Completed Live (1 st Feb 17) 10 Nasik (Maharashtra) 1346 1200/1200 Completed Live (1 st Feb 17) 11 Raigarh (Maharashtra) 200/200 Completed Live (1 st Feb 17) 12 Tumkur (Karnataka) 533 305/282 Completed 13 Narmada, (Gujarat) 95 95/45 Completed Dry Run (26 th Nov 16) Po. S under Deployment. 14 15 Thrissur, (Kerala) Malda, (WB) 178 200/72 Completed Replaced over Kannur. 800 16 South 24 Parganas, WB) 1225 Not Implemented as State Govt. has not shown any interest. 17 Begusarai, (Bihar) 694 18 Dhanbad, (Dhanbad) 26 19 Gorakhpur, (UP) 1488 Department of Fertilizers Total 11353 Three additional districts were included in Pilot on 27 th January, 2017. Sensitization process has been initiated. 6422/5928 Slide 14

Stakeholders Responsibility Key Stakeholders Department of Fertiliser Responsibilities v Act as Nodal agency to oversee, coordinate, monitor and facilitate adequate support in implementation of DBT in all pilot districts. District Collector v To coordinate, monitor and facilitate adequate support in implementation of DBT in their district. v Constitute “DBT working group” comprising of all stakeholders at District Level. District / Block Agricultural officers (BAO) v To ensure the available stock update is correctly done at retailer end. Lead Fertilizer Companies v Reconcile all stock at District warehouse/ wholesaler/ Retailer/ Plant wise/ Product wise and update the same on mfms website. v Ensure correction of any wrong stock entry reported via mfms portal. v Ensure that all fertilizer retailers/ wholesalers have the mfms credentials. v Readiness for e-bill generation using e-sign. v Ensure from Go-Live date, all movement of fertilizers will be captured on real-time basis and updated on mfms portal. DIOs’(NIC) / District Consultants v Ensure the District Agricultural Officers are issued with credentials for mfms. nic. in. v Coordinate alongwith the nodal officer of each district/Lead Fertilizer Companies operating in that state for : § Installation of Point of Sale (POS) Machines at retailer’s outlet. § Capturing dealer and other representatives ‘Aadhaar’ data on POS Machine. § Diligently conduct Dry run of DBT Pilot followed by full scale implementation. v Capacity Building and Grievance Addressal of DBT users in the districts. Department of Fertilizers Slide 15

Preparatory Activities by State Governments & District Collectors i. To ensure 100% Aadhaar penetration in DBT districts. ii. Seeding of Aadhaar number in soil health card data base. iii. Seeding of Aadhaar in Land Record Database. iv. Constitution of “DBT working group” comprising of all stakeholders at District v. Level. Monitor procurement of Po. S devices through LFS as per specification approved by NIC vi. To ensure through fertilizer companies/State Agriculture Department that dealer’s list uploaded on i. FMS is latest/correct. vii. To ensure that the stock position at company warehouse and retailers are always updated in i. FMS. viii. Providing of details of district/block/mandal officer to NIC along with mobile number, so that login can be created for them to access their i. FMS portal. ix. Setting up grievance redressal mechanism. Department of Fertilizers Slide 16

Roles and Responsibilities – Companies 1. Procurement of Po. S devices/tablets and installation of application as per instructions issued by NIC. (http: //mfms. nic. in/ ). 2. Deployment of Po. S devices/tablets at retail points. 3. Depute a nodal officer for each district for coordination with District Administration. 4. Arrange district level workshops with retailers. 5. All sale transactions (Company to wholesaler or retailer) must be entered online on real time basis. 6. Sensitize the field officer in district regarding implementation of DBT. 7. Complete a network survey of all retail points for connectivity assessment. 8. Availability of Aadhaar for all retailers. 9. Coordination with device vendor and NIC to sort out hardware/software issues. 10. Periodic reporting to Do. F and District Collector. Department of Fertilizers Slide 17

Responsibilities of NIC i. Software development of i. FMS, DBT (Po. S Devices) ii. Troubleshooting and Helpdesk Support iii. Proper Coordination with device vendors to sort out hardware/ software issues. iv. software application or MIS on Key Performance Indicators. Department of Fertilizers Slide 18

PAN India Deployment of Po. S Devices Ø Vide Cabinet decision dated 25 th October, 2012, Rs. 50/MT was allowed for acknowledging the receipt of fertilizer through m. FMS portal. Ø No action was taken by Fertilizer companies/Retailers to implement this decision. Ø In a workshop held on 16 th September, 2016, it was made mandatory to acknowledge fertilizer receipt through Po. S devices w. e. f. 1 st January 2017. Department of Fertilizers Slide 19

PAN India Deployment of Po. S Devices Ø Since no action was taken to install, date of deployment of Po. S machines was extended by one month, i. e. , upto 31 st January, 2017 during workshop held on 11 th November, 2016. Ø As companies failed to comply revised deadline, this deadline has been further extended to 31 st May, 2017. It has been clarified to companies that after 31 st May, 2017, subsidy will be paid only on the quantity of fertilizer sold through Po. S devices. Department of Fertilizers Slide 20

The Way Forward: Rollout of Po. S Devices across all States Steps Involved i. Procurement of devices. i. : 175619 a) In 19 States/UTs where PSUs are LFS : 81080 b) ii. Total requirement in 35 States/UTs In 14 States/UTs where Pvt. Companies are LFS : 94539 Preparation of devices (Installation of software). iii. Training of Master for all states. (For Pilot states conducted & for other Trainers states training scheduled. ) iv. District wise training of retailers. v. Deployment of devices. Department of Fertilizers Slide 21

State wise Po. S Requirement S. No. State/UT LFS Retailers S No. State/UT 24050 8873 8222 2792 2175 2136 173 19366 20 21 22 23 24 25 26 27 28 29 1 2 3 4 5 6 7 8 9 10 Bihar Punjab Madhya Pradesh J&K Himachal Pradesh Chhattisgarh Delhi Maharashtra Gujarat Dadra & Nagar Haveli 10037 GNVFC 2 11 12 13 14 15 16 17 18 19 Daman & Diu Kerala Assam Tripura Manipur Mizoram Meghalaya Nagaland Arunachal Pradesh 1 FACT 2503 569 123 37 BVFCL 9 6 4 2 Department of Fertilizers NFL RCF 30 Uttar Pradesh Jharkhand Uttrakhand West Bengal Andhra Pradesh Odisha Telangana Tamil Nadu Puducherry Andaman & Nicobar Islands Rajasthan 31 LFS IFFCO NFCL SPIC Retailers 30191 2239 918 13348 7981 3089 5374 9463 43 2 Chambal 8966 Karnataka MCFL 7740 32 Haryana 5126 33 Goa KRIBHC O ZIL TOTAL Po. S Required 59 175619 Slide 22

Deployment of Po. S devices – in states (19) covered by PSUs S. No. LFS State/UT Retailers Total Status Bihar Punjab Madhya Pradesh J&K Himachal Pradesh 24050 8873 8222 2792 2175 Chhattisgarh Delhi Maharashtra 2136 173 19366 • LOI has been issued on 24 th Nov 16 for 81080 Po. S device to following 3 vendors [M/s Oasys (36486), M/s Linkwell (28378), & M/s Analogics (16216)]. • NFL has issued order for 8180 Po. S on 15 th Dec 2016. • RCF has issued order for 6778 Po. S on 23 rd Dec 2016 Gujarat 10037 Dadra & Nagar Haveli Daman & Diu 2 Kerala Assam 2503 569 14 Tripura 123 15 Manipur 37 Mizoram 9 17 Meghalaya 6 18 Nagaland 4 19 Arunachal Pradesh 2 Department of Fertilizers TOTAL 1 2 3 4 5 6 7 8 NFL RCF 9 10 GNVFC 11 12 13 16 FACT BVFCL 48421 19366 10040 1 2503 • NFL has received 1563 Po. S machines by 20 th Jan, 2016. • Delivery Schedule : Remaining Po. S machines expected to be delivered by one month time. 750 81080 Slide 23

Deployment of Po. S devices – S. No. LFS 1 2 3 4 5 6 7 8 9 10 IFFCO in states covered by Private Companies State/UT Retailers Total Uttar Pradesh Jharkhand Uttrakhand 30191 2239 918 13348 7981 3089 5374 9463 43 2 8966 7740 33348 11 12 MCFL Karnataka 13 KRIBHCO Haryana 5126 14 Chambal West Bengal Andhra Pradesh Odisha Telangana Tamil Nadu Puducherry Andaman & Nicobar Islands Rajasthan ZIL Goa 59 59 TOTAL Expected Delivery Date Tender opened on 27 th January 2017. Expected Delivery by: 25 th February, 2017 PO already issued. 94539 NFCL SPIC Department of Fertilizers 29792 9508 Expected Delivery by: 15 th February, 2017 Despite repeated requests no action taken Order placed on 20 th January 2017 Despite repeated requests no action taken Slide 24

Training of master Trainers/Retailers i. Training of master Trainers - done for pilot districts. ii. For remaining states workshop being done today. iii. Training of retailers will have to be held district-wise. iv. Full support of District Collectors, District Agriculture Officer , DIOs and State Government required for training and deployment of devices. Department of Fertilizers Slide 25

Thank You Department of Fertilizers Slide 26