Company (Subsidy point)
↓
Wholesaler
↓
Retailer
↓
Farmer
Proposed System (THREE PHASES)
Phase-1
Subsidy point-(Companies)
In this phase which started at January 1,2012,fertilizer ministry tracks every kg of fertilizer till it is eventually sold. Wholesalers and retailers need to submit the data of sales made everyday .So in this phase government want to maintain daily data of sales done. Government will pay 95%of subsidy upfront to company but 5% of subsidy to company will be payed only after it receives SMS/Internet the confirmation from retailers on having received the stock.
Company (95% subsidy paid upfront after SMS is received from wholesaler and retailer remaining 5%paid)
↓
Wholesaler
↓
Retailer
↓
Farmer
Phase-2
Subsidy point-(Retailer/wholesaler)
In this phase which may start from june,2012 wholesalers and retailers will buy fertilizers at unsubsidized rates.Than they will inform the government about their purchases, either online or through SMS and than government will deposit the subsidy in their bank account.But without credit wholesalers and retailers require thrice as much working capital buy the same stock. So the volume of purchase of fertilizers by retailers and wholesalers may decrease.
Company (Subsidy point)
↓
Wholesaler
↓ (subsidy point is both at retailer and wholesaler)
Retailer
↓
Farmer
Phase-3
Subsidy point-farmers
In this phase which is targeted at 2014 and is contingent on all farmers getting AADHAR number. Than subsidy will be directly transferred to saving accounts of farmers.
Company
↓
Wholesaler
↓
Retailer
↓
Farmer ( point is farmers where money directly transferred in SAVINGS ACCOUNT through AADHAR CARD )
