A crisis of identity

The Centre should make all attempts to recommence subsidised LPG cylinder sales through direct transfers of money into the Aadhaar-seeded bank accounts of consumers, as recommended by an official committee constituted to review the scheme. The panel has reiterated the obvious benefits of the direct benefit transfer (DBT) for LPG scheme, discontinued by the previous government less than a year after its rollout and bogged down by a judicial diktat prohibiting the denial of any service for the absence of an Aadhaar card. Significantly, the scheme eliminated some 6.2 lakh ghost LPG connections out of the total 40 million consumers in the 291 districts where it was being implemented. This was done through simple de-duplication by using Aadhaar to authenticate the identity of each consumer based on his/her unique biometrics. Secondly, since all LPG cylinder sales were at the market price and subsidy was being transferred separately into consumers’ bank account, it disincentivised diversion by dealers.

Given that the subsidy burden on LPG cylinders has mounted from around ₹14,300 crore to ₹46,500 crore between 2009-10 and 2013-14, the Centre is duty-bound to ensure any benefits go only to the end-user. The DBT approach — where everyone pays the market price and the subsidy is credited independently into the bank accounts of the intended beneficiaries — needs to be extended to fertiliser, food and every other product/service where a case for protecting vulnerable consumers using taxpayers’ money exists.

If DBT is indeed the way forward, then Aadhaar — under which 60 crore people would be covered by end-2014 — provides a good vehicle. The latter is ultimately nothing more than a robust technology-based mechanism to identify every individual and make sure the person receiving the subsidy isn’t an impersonator. True, there have been shortcomings in the rollout and flaws in the manner the scheme was sold to the country; but the basic idea behind the scheme is sound. It was a mistake to pretend that the scheme was voluntary and the Centre should have moved much more quickly to confer the Unique Identification Authority of India with statutory status. It is these failures that came to haunt the previous government and contributed to the issue being caught up in a time-consuming and self-defeating legal morass. It would be a pity if the entire scheme, the constitutionality of which has been challenged, is scrapped because of those who are reflexively against cash transfers and have raised exaggerated concerns about privacy intrusion. The way forward is to see that more and more people are enrolled in Aadhaar and work towards an environment where those deserving of subsidies and other benefits fully avail of them without having to negotiate corrupt middlemen, an insensitive bureaucracy and an inefficient delivery system.

COMMENT NOW