Panel favours cash subsidy for LPG

New government may not junk Aadhaar

The ambitious project of transferring the cooking gas subsidy directly into the bank accounts of customers has found favour with a panel set up to review it. The 12-member committee, brought in by the United Progressive Alliance (UPA) government, has found merit in the cash transfer scheme despite ground level hurdles.

It is, however, not clear if the panel will recommend the continuation of cash transfers for the cooking gas subsidy, given the uncertainty over Aadhaar. One of the committee members said the report, to be officially given by May 31, had been finalised. "The scheme is being considered with Aadhaar, as the number of fraud (transactions) might increase without that linkage," he said.

Aadhaar has been the subject of open criticism by the Bharatiya Janata Party (BJP), which registered a staggering victory in the just-concluded Lok Sabha polls and will form the government at the Centre on Monday. This has led to widespread speculation in the bureaucracy that the UPA's showpiece unique identity scheme may be put on hold by the next government.

FINDING FAVOUR

• Aadhaar had earlier drawn some criticism from BJP; this had led to speculation the UPA govt’s marquee scheme might be put on hold by the new govt
• PM Modi had stopped enrolments under the National Population Register in mid-2011, raising questions about legitimacy of collecting biometrics; but he had also flagged off UID enrolments in Gujarat in May 2012
• On Jan 30 this year, the direct benefits transfer for LPG consumers scheme was put on hold, following complaints of difficulties in linking LPG accounts with bank accounts and the Aadhaar number
• A 12-member panel, set up to suggest course correction, is now convinced that this project should continue, as the subsidy burden has to be reduced

However, some officials are optimistic. "The BJP may have opposed Aadhaar but the project has found great support in Narendra Modi's (soon to be prime minister) Gujarat," said a government official, asking not be named.

Modi had stopped enrolments under the National Population Register (a scheme that runs parallel to Aadhaar) in mid-2011, raising questions about the legitimacy of collecting biometrics. He had written to Prime Minister Manmohan Singh highlighting this, as well as the problem of duplication of effort. However, he himself flagged off enrolments under Aadhaar in his home state in May 2012. Almost 70 per cent of Gujarat's population had already been enrolled, added the official.

"Being the result-oriented man he is, Modi may find there is no other method as efficient as Aadhaar to reduce the country's subsidy burden, which runs into Rs 3,00,000 crore each year," said another government official who did not wish to be named.

On January 30, the cash transfer of cooking gas subsidy was put on hold after consumers complained of difficulties in linking their gas connections with their bank accounts and their Aadhaar numbers. Cash cooking gas subsidy had climbed to Rs 3,000 crore before it was put on hold.

The 12-member committee, headed by a former director of the Indian Institute of Technology, Kanpur, was set up to suggest a course correction. The committee was convinced this project must continue as the subsidy burden had to be reduced, said another member of the committee. "While it (cash transfer) was on, the sale of cylinders had gone down significantly," the person said.

To address the issue of multiple linkages, the committee might recommend a single point of contact for redressal of problems in connecting gas accounts with banks and Aadhaar numbers. An incentive programme for consumers switching to the new system early might also be introduced.

There was consensus among all members of the committee that it was a good scheme, with a few loopholes, said another government official. "There was absolute agreement that the way the scheme was running was very good," said the official. Asked whether the committee would suggest linking it with Aadhaar, he said that call would have to be taken by the new government in light of the Supreme Court's judgment not to link welfare benefits to Aadhaar.

Another official said cash transfers were working fine without Aadhaar and linking it would complicate matters for banks. Gas accounts could be directly linked to bank accounts, but if the linkage were through Aadhaar, the possibility of people diverting the subsidy into multiple bank accounts would be less, said yet another government official.