A few fertilizer shops in Telangana and a large number in Andhra Pradesh, besides two other States, have shut down businesses as they did not renew licences after the launch of Aadhaar enabled Fertilizer Distribution System earlier this year.
A study commissioned by NITI Aayog by a consulting firm found that nearly 300 fertilizer retailers in six districts of Madhya Pradesh, Rajasthan, Telangana and Andhra Pradesh have not renewed their licences.
As many as 181 of these shops are in Krishna and West Godavari districts of Andhra Pradesh alone.
The Aadhaar enabled Fertilizer Distribution System or Direct Benefit Transfer was supposed to streamline fertilizer distribution with retailers with a view to cut down leakages and lower the subsidy of the Central Government, which was about Rs. 70,000 crore this year.
The government asked all fertilizer companies to deploy Point of Sale (PoS) devices at all retail points for acknowledging the receipt of fertilizer and issuing receipts to farmers.
The DBT system was a modified subsidy payment system where fertilizer companies will be paid 100% subsidy only after sale of fertilizer to farmers through PoS machines and biometric identification of buyers.
The consulting firm’s study showed that improved tracking and reduction in diversion led to retailers leaving the system.
Overcharging also went down as farmers got printed receipts with details of MRP and the subsidy paid by the government. Sources said there are about 6,700 wholesale and retail shops dealing exclusively in fertilizer in Telangana but only 3,650 PoS machines were delivered so far. The delivery was slow because only a couple of companies are engaged in the manufacture of machines. The supplies had reached saturation point in Ranga Reddy district where the project was taken up on a pilot basis along with 15 other districts in the country last year.
The deadline for pan-India roll out was March 31 next year.
Ranga Reddy Collector M. Raghunandan Rao told The Hindu that a dozen fertilizer companies had fixed the PoS machines free of cost at shops in the district. Nothing had changed for the farmers as they continue to enjoy the subsidy at the same rate.
The companies submitted bills on the basis of digital mode of payments and claimed subsidy.
The subsidy on a 50-kg bag of urea was more than Rs. 600 as its ex-factory rate ranges from Rs. 900 to 1,000, but the farmers got it a flat Rs. 291.