In a meeting held in the Prime Minister's Office earlier this month, a
decision has been taken to gradually initiate Aadhaar and non-Aadhaar
based LPG subsidy transfer through the oil marketing companies-
IndianOil, Bharat Petroleum and Hindustan Petroleum.
While the
government has attempted to check wasteful use and diversion of
subsidized LPG by putting an annual cap of six cylinders beginning last
month, a single price coupled with direct transfer will further remove
an incentive for unauthorized deliveries.
With over 80% Aadhaar coverage, Mysore district was chosen for a pilot scheme linking the unique Aadhaar identity numbers with domestic LPG supply, to prevent misuse of subsidised LPG. The pilot started around August last year and aims to test efficacy of direct subsidy transfer on domestic LPG.
As a test case, oil companies charge Mysore consumers a price that is
Rs 10 per cylinder higher than other districts in the state and this
amount gets credited back to the consumers' account that is Aadhaar
linked. However, it is learnt that State Bank of India [ Get Quote ] which is the sponsor bank in this pilot is seeking a transaction fee for transfer of subsidy.
The petroleum ministry has sought a clarification from the Department of Financial Services if such a fee can be levied by SBI.
A dual pricing of domestic cylinders has come into being after the
cap was imposed. In the capital, a domestic consumer is entitled to get
six LPG cylinders at a price of Rs 410 each while he will have to pay a
market price of Rs 894 for each additional cylinder.
Under the
proposed single price regime, all domestic LPG cylinders will be sold at
market price and the differential on the first six will be directly
transferred to Aadhaar Enabled Bank Account of consumers.
Though the Aadhaar identity has emerged as a tool to eliminate duplicates and fake identities in LPG connection but considering its low penetration, the government will have to depend on bank accounts for customer authentication as well as subsidy transfer, said an oil company executive.
LPG pilot was also planned for Hyderabad and Pune but it could not
take off. In Hyderabad, it has been temporarily suspended as consumers
are unwilling to share Aadhaar and related details with oil companies
and state government has ruled out compelling consumers.
In
Pune, it has been altogether suspended due to low Aadhaar penetration.
The government now plans to extend pilot to 50 districts.