Families across Maharashtra will lose their cooking gas subsidy by March next year if they do not have bank accounts linked to Aadhar numbers, the state government has announced. A move that has provoked widespread criticism from those who fear it will end up excluding hundreds of poor households from this much-needed benefit.

The market price for cooking gas is around Rs 950 to Rs 1000 per cylinder. Households are entitled to nine discounted cylinders each year which cost Rs 450 - less than half that sum. Once the Aadhar-LPG scheme becomes mandatory, families will not get discounted cylinders. Instead, the subsidy will be transferred directly into their bank accounts. To get the benefit however, citizens will have to get an Aadhar number, link it to their bank account and also to their consumer number at the LPG agency, officials said.

The scheme to dispense unique identification numbers to citizens across the country was flagged off in Maharashtra’s Nandurbar district in September 2010. With 7.3 crore enrolments so far, the state has covered 65 per cent of its population and ranks second in the country after Andhra Pradesh. Officials say the Aadhar number will help weed out duplicate or ghost beneficiaries of welfare schemes. “The direct cash transfer will ensure that subsidies reach the real beneficiary and are not diverted,”adds state information technology secretary Rajesh Agarwal.

But critics say there is a wide gap between official rhetoric and reality. “The government talks about its enrolment figures. But even after enrolment it takes 6-8 months to generate the Aadhar number. A large number of poor families do not have bank accounts, which will take time to open. And then the account has to be linked to the LPG registration number, a process called seeding. Implementing this hastily will mean that many poor families will get excluded from this benefit and it will cause a lot of hardship,” says R Ramakumar assistant professor from the Tata Institute of Social Sciences.

So far the scheme is mandatory only in Wardha district where officials say the bulk of the population has been enrolled. Yet activists say even here the problems are immense. Öfficials say 80 per cent of the population has been enrolled. What about the other 20 per cent – that is a very large number of people left out,”says the AIDWA’s Kiran Moghe who recently visited Wardha.

In many cases, people have applied for Aadhar numbers and not received them, she says. Also the process of linking it to bank accounts and LPG numbers has been done haphazardly and remains incomplete, she adds. Üntil the linkage is complete, the subsidy will not be delivered. “Those who suffer the most are the poor – labourers who lose out on wages by standing in queues,” Ms Moghe points out. Even if all goes well, the cash subsidy reaches the bank account much after the gas cylinder is purchased. “That means people will have to pay Rs 1000 – the market price for a cylinder outright. How will the poor be able to afford it?”she asks.

Officials say each district has been given a three month grace period to get things in order. “We will ensure that genuine beneficiaries are not excluded. The scheme is being implementing keeping in mind that 80 per cent of each district will be enrolled by then. Also, the RBI has issued a directive to banks that they should open accounts for all Aadhar-holders. So those who don’t currently have bank accounts will not be left out.”says Rajesh Agarwal, state information technology secretary. However, Ms Moghe says banks are not following the spirit of the directive. “The RBI told banks to open a no-frills account but they are insisting on an opening deposit, which is not possible for the poor,”she say.

There are those who are questioning the state’s right to make the Aadhar number mandatory. The Aadhar card was meant to be voluntary. Why is it being made compulsory,” asks Ramakumar. He points out that a parliamentary standing committee had rejected a bill which proposed making the Unique Identification Authority of India”, which is overseeing the project, into a statutory authority.