The task force on reforming the subsidy distribution system headed by Nandan Nilekani is in the process of having discussions and pilot studies. As and when the task force submits its final report, the same would be taken up for consideration and implementation by the government. The information was provided by Srikant Kumar Jena, minister of state for chemicals and fertilisers, to the Rajya Sabha on Friday.

He said that the government has constituted a task force on transfer of direct subsidy in the case of fertilizers, liquid petroleum gas (LPG) and kerosene under the chairmanship Nilekani, chairman, unique identification authority of India (UIDAI) on February 14, 2011. The task force has submitted its interim report to the government on July 5, 2011, which can be seen on Finance Ministry’s portal ‘www.finmin.nic.in’.

In its recommendations, the task force has advocated a phased approach for the implementation of the transfer of direct subsidy to beneficiary. In phase one, the focus will be on information visibility about the movement of goods across the fertilizer supply chain, till the last point at the retailer, from whom the farmer buys the fertilizers. This information on availability of the retail point will be made available on transparent public portal.

In the second phase, it is envisaged that the subsidy will be released to the retailer (last point sale) when he receives the fertilizer. This will involve transfer of subsidies directly to the retailer bank account on receipt of fertilizer from the wholesaler. The advantage of this phase is that fertilizer will more at full value across the supply chain up to the retailer.

In the last phase, emphasis will be to transfer subsidy to intended beneficiaries once the AADHAAR numbers are already assigned (to the beneficiaries) and AADHAAR enabled payment bridges are in place.