With an aim to slash the soaring fertiliser subsidy bill, the Government on Thursday approved a plan to link the roll out of fertiliser subsidy to manufacturers with the acknowledgement of receipts from vendors.

Experts welcomed the move saying it would help stop the prohibited sale of subsidised fertilisers at market-linked prices.

Srikant Jena, minister of state for chemicals & fertilizers, said that the government would continue to give subsidy to fertiliser manufacturers. The only change the government made to the system was that it had added another level of transparency to the movement of fertilizers.

The Cabinet Committee on Economic Affairs also hiked urea prices by Rs 50 a tonne to incentivise retailers to provide receipts via the Fertiliser Monitoring System, which is through mobile phones.

As there is currently no proper mechanism to monitor how much of the subsidised urea is really supplying to farmers, some fertiliser manufacturers allegedly sell subsidised urea at market prices in international markets.

A pilot project to monitor sale of subsidised urea using kisan credit cards, bank account numbers or Aadhaar numbers will soon be launched in ten districts across the country. The project will come into force by the end of current year.

However, India Ratings & Research Director Salil Garg said the move wil show no immediate impact because the implementation of the payment method by gathering the essential data will take at least two-three years to stabilize.