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Updated: October 20, 2013 19:28 IST

Despite hurdles, Centre keen on pushing LPG cash transfer

Sujay Mehdudia
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Deputy Chairman of the Planning Commission Montek Singh Ahluwalia addressing the India PPP Summit 2013 in New Delhi on Monday.
Deputy Chairman of the Planning Commission Montek Singh Ahluwalia addressing the India PPP Summit 2013 in New Delhi on Monday.

The Centre may be struggling to convince LPG consumers to link their Aadhaar card numbers with their bank accounts. But that has not stopped it from going ahead for an October 1 launch of the direct benefit transfer (DBT) scheme for a majority of the 14 crore consumers.

The government convened a meeting of 121 district magistrates from various parts of the country on Monday to discuss the launch of the scheme in phases from July 1. The plan is to extend it to the majority of the LPG consumers on the rolls of the oil marketing companies (OMCs) by October 1, subject to their coverage under the Aadhaar scheme.

Under the scheme, a consumer has to seed his or her bank account with the Aadhaar number to get the LPG subsidy transferred directly into the account. The annual subsidy per consumer is estimated at Rs. 4,000. The supply of subsidised LPG cylinder has been capped at 9 a year per consumer.

The OMCs have started asking customers to register their Aadhaar card numbers with them. However, several consumers are refusing to share the numbers with the banks. “We have had only 20 to 30 per cent success rate in pilot projects launched in 20 districts. Consumers are ready to give the Aadhaar numbers to the OMCs but not to the banks. There is also the issue of Aadhaar penetration, which is very patchy in different parts of the country,” a senior Petroleum Ministry official remarked.

While about 32 crore Aadhaar cards have been issued by the Unique Identification Authority of India (UIDAI), only 80 lakh bank accounts have been linked to the unique identity numbers so far, officials said. Consumers will have to buy LPG cylinder at the prevailing market price (currently Rs. 901.50 per 14.2-kg cylinder in Delhi) once the scheme becomes operational. Although, the Finance Ministry has asked public sector banks to get ready for the DBT scheme, the progress thus far does not augur well for an October 1 launch.

Deputy Chairman of the Planning Commission Montek Singh Ahluwalia admitted at the conference of district magistrates on Monday that it would take another 5 to 6 months to get the scheme rolling. The meeting was addressed by Finance Minister P. Chidambaram, Rural Development Minister Jairam Ramesh and Petroleum and Natural Gas Minister Veerappa Moily.

I am an honest tax payer and i don't have any problem giving my aadhaar number to bank. I have in fact already done so. Since 60-75 percent of consumers are not giving their aadhaar number to banks it means only one thing. That they are doing number two business and evading taxes. Aadhaar project is already starting to show results.

from:  Mukesh
Posted on: May 1, 2013 at 11:18 IST

apropos Centre keen on pushing LPG cash transfer
Why the govt bothers to collect the subsidy amount in advance and then refund at next year beginning or after proper accounting. The process will repeat year by year and it is a big headache both to consumer and Govt.
In lieu of this why cant Govt subscribe compulsary deposit one time towards funding 9 cylinders in a year the deposit amount of Rs 4500/- from every customer and refund without interest on surrender of the connection. The Govt may or may not give a token interest of 4.5% per annum on the deposits. This idea can solve lot of hurdles. The subsidy of approximately Rs 500 per cylinder will be given to those customers who have successfully deposited into Govt coffer to the extent of 9 cylinders per year.

from:  b n venkataraman
Posted on: Apr 30, 2013 at 17:04 IST

I do wonder whose brainchild is this DBT for LPG cylinders. It is going to be burden for the majority who have to shell out more money in the first place and then keep track of the DBT in the Bank. If the DBT is not credited neither the the Bank nor the dealer will be able to help the customer. It is a futile execise wherein more people will be employed to keep track of the transactions and waste of time and mone at the end. This scheme is OK for the poor where there is much exploitation but not in LPG which has been stremlined well in most of the places. If one gets a transfer to another place then his Bank account and dealer will change resulting in further confusion and the customer is the loser ultimately.

from:  Siva
Posted on: Apr 30, 2013 at 15:58 IST

It is surprising how the GoI is pushing a proposal knowing well that it
will not be successful. It seems that the ultimate aim is to collect
full cost of LPG as the customers will never get refund of subsidy part
because the system is not likely to work (so far the success rate is
hardly 30%). Though ADHAR card has been issued, Bank a/c not
incorporated in it. Besides, it is not clear what will happen those
consumers who are in transferable job.

from:  A Roy Burman
Posted on: Apr 30, 2013 at 09:19 IST

The manner in which the AAdhar numbers are to be intimated to the oil companies must be widely advertised. Is the number to go the Indane supplier or to the Indane company HQ.THIS NEEDS TO BE CLEARLY STATED.

from:  subbanarasu divakaran
Posted on: Apr 30, 2013 at 02:32 IST

If people don't want to link Aadhaar card no to their bank accounts that is a positive for the LPG subsidy scheme. That means they prefer to forfeit the subsidy on 9 cylinders annually i.e. around Rs.4000 per year to keep their bank account free from Aadhaar linkage. That in turn means, the Govt has to give only one fourth of the subsidy or say after more register 50% of the subsidy as if all accounts were linked. Probably those who do not link are better off and feel that rather than giving their bank account linkage with Aadhaar which in turn will link to various other assests owned/purchased by them, they prefer to forego the subsidy. It will result in unexpected gain to the Govt by quick subsidy cut. In any case, in the long run, Govt has to phase out subsidy to higher income groups and provide it only to BPL consumers.

from:  Raj
Posted on: Apr 30, 2013 at 00:26 IST
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