Oil Ministry seeks clarity for smooth rollout in more districts

The pace of implementing the Aadhaar-linked subsidy scheme for LPG has slowed down following the Supreme Court’s recent ruling that the unique number cannot be made mandatory for welfare schemes.

The latest data for the week ended October 27 show that the increase in those opting for such schemes has been only 0.4 per cent against up to five per cent earlier.

There is confusion in the minds of customers after the Supreme Court said that public services, such as LPG connections, cannot be denied to a person if he/she does not possess an Aadhaar number, a senior Government official said. This is being contested by the Government, he added.

However, till a final verdict is out, the pace of the Government’s ‘game changer’ Direct Benefits Transfer (DBT) of LPG scheme, being implemented by the Ministry for Petroleum & Natural Gas, will slacken.

Under the scheme, cash subsidy is directly transferred to a customer’s bank account as soon as he/she books a refill. Both the bank account and LPG customer number are linked to Aadhaar.

“Immediate clarity is required, as it is affecting the implementation of an otherwise successful programme,” an official told Business Line.

He said the scheme had helped reduce black marketing, removed customer duplication and had cut LPG imports. “We have already cancelled 0.86 million tonne of LPG imports. Every year, India imports about 6 million tonne of LPG,” a Petroleum Ministry official said.

Phase one of the scheme was launched in June in 18 districts of eight States and two Union Territories, which was extended to 20 districts in August. As part of the decongestion programme before launching the scheme, oil companies had removed 63 lakh customers who had more than one connection. The total LPG customer base now is around 15 crore, with around one crore new consumers added every year.

The Government has decided to extend the scheme in 235 more districts by January 2014 in phases, depending on Aadhaar penetration. With this roll-out, almost half the country, covering 289 districts, are expected to get covered by January.

Today, the scheme is operating in over 144 districts, covering 8.3 million consumers.

The official said “in States where Aadhaar penetration is good, there is no problem. But in States such as Uttar Pradesh and Bihar, where the Aadhaar availability is low, this uncertainty will create an issue.”

Public sector oil marketing companies have already spent close to Rs 1,000 crore as subsidy on LPG, which is yet to be reimbursed by the Finance Ministry. The Petroleum Ministry is looking at an outgo of almost Rs 9,000 crore in the scheme.

The reimbursement for the current fiscal is expected to come in the second supplementary demands for grant to be considered in the Winter session of Parliament.



(This article was published on November 6, 2013)
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