NITI Aayog, GNFC ink SoI for research on Blockchain Technology for fertilizer subsidy management

June 30, 2018

NITI Aayog has signed Statement of Intent (SOI) with Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC) to work together for implementing Proof-of-Concept (PoC) application for fertilizer subsidy management using Blockchain Technology.
Key Facts
Under this collaboration, NITI Aayog and GNFC will jointly develop PoC application, under take research, develop blockchain solutions, exchange learnings, organise forums, and disseminate learnings across their networks. PoC’s learnings, insights and outcomes will enable NITI Aayog to suggest policy recommendations and actions in strengthening subsidy mechanism, making it more transparent and immune to leakages.
Background
Fertilizer units manufacture approximately 31 Million MT of fertilizers across country. Government annually disburses approximately Rs. 70,000 crore of subsidy to manufacturing units. The subsidy disbursal takes two to three months’ time. Moreover, there are multiple entities involved in verification process, which makes transaction process very cumbersome which has potential to be automated to give significant efficiency gains. With implementation of blockchain Technology, it is expected that distribution will become effective and efficient, and subsidy transfer could be automated and made real time.
Significance
Blockchain platform have inherent characteristics of distributed computing and ledger for keeping of transactions i.e. authenticity, confidentiality, non-repudiation, data integrity and data availability. Implementation of this platform for fertilizer subsidy management will ensure that there is no dependence on intermediary agencies to prove 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. It will also ensure transparency in the process as transactions cannot be altered and audit trails of transactions are available.

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