An experiment by public sector oil marketing companies to plug alleged leakage of subsidy on cooking gas (domestic LPG) may see ‘Aadhaar' – the unique identity number being given out by the UID Authority – becoming mandatory to secure a refill or a fresh connection.
This raises questions on whether Aadhaar is making a backdoor entry even as the Unique Identification Number, one of the most ambitious projects of the Government to drive welfare programmes, is facing resistance from within the establishment as well as Opposition parties.
Oil PSUs say the experiment is a bid to prevent unauthorised persons from receiving subsidised cooking fuel (domestic LPG) cylinders.
Under the pilot project, the companies have made Aadhaar numbers mandatory for refills in three cities in the country. In these cities also it is restricted to one distributor each for each of the three oil companies.
On Aadhaar making a backdoor entry, a top oil company official said, “No, this is not the case. If verification of Aadhaar numbers is not made mandatory while delivering the LPG cylinder, the risk of subsidy being extended to those not deserving, is high. Verification of Aadhaar number of the customer or family members or authorised representatives is to disable such instances.”
Led by Indian Oil Corporation, the companies, in the pilot are planning to use Aadhaar numbers for direct transfer of cash subsidy to 50,000 customers of cooking gas in each of the three cities – Mysore, Hyderabad, Pune.
This is being done in order to reform the current system of delivery of subsidised products – which is riddled with waste, leakage, adulteration and inefficiency, the official pointed out.
Phase-wise implementation
The Task Force on Director Transfer of Subsidies on Kerosene, LPG and Fertiliser has suggested a detailed phase wise implementation plan to achieve direct subsidy transfer for the targeted households.
A decision on phase I – cap on consumption of subsidised cylinders – is yet to be taken by the Government, while phase II – direct transfer of cash subsidy to consumer – is being implemented on pilot basis by the companies.
A joint working group with members from the Ministry of Petroleum & Natural Gas, oil companies, UIDAI, and Ministry of Finance has been formed to implement the pilots for LPG in second phase.
Initially, for phase II, two pilot locations – Hyderabad and Mysore – were identified. Now it has been extended to Pune.
The companies appointed Ernst &Young as consultant and iGate Patni as system integrator for the pilot.
How does it work? The LPG cylinders will be sold at a market price and the differential as subsidy will be directly transferred to the Aadhaar enabled bank account of the customer.
“Single price and direct subsidies will further remove the incentive for unauthorised deliveries,” the official said.
“The successes of pilots depend on the willingness of customers and other stakeholders to participate and deployment of trouble free technological model. We are in constant touch with UIDAI technical and administrative team for improvement in the processes and fine tuning the modalities,” the official said.