Aadhaar side of domestic LPG

Despite a Supreme Court interim order that Aadhaar enrolment is voluntary and not necessary to avail essential subsidies, LPG consumers in the City are apprehensive that without an Aadhaar-gas-bank account linkage, they might be out of the subsidy loop.

Fifty-five year-old Shanthamma had worn the Below Poverty Line (BPL) tag for long. Her BPL card had helped her family of four stay afloat, heavily dependent as they were on the subsidised rations including the domestic LPG cylinders. But news of the Aadhaar-based Direct Benefit Transfer for LPG (DBTL) had left her deeply worried. Clueless, confused, she begged for clarity.

The subsidy amount, she had heard, would be deposited back into her bank account. Yet, she had no idea from where she would raise that initial amount of Rs. 1,265, the commercial charge fixed for a domestic LPG cylinder in the City. A domestic maid with extremely modest income, she knew she had not much time left, as her employer read out a Petroleum Ministry advertisement that was clear in its intent: Link your connection to the Aadhaar number and a bank account, or say goodbye to subsidy.
Officially, the oil companies and LPG distributors say the Aadhaar number is not mandatory to get the subsidy. But the advertisements declare otherwise.

A recent one, widely notified by the Union Ministry of Petroleum and Natural Gas in many newspapers, had urged consumers to first link their Aadhaar number with their bank account number, before linking the Aadhaar number with the LPG consumer number. The advertisement emphasised the urgent nature of the scheme, reminding consumers that they had just three more months to comply!

The apparent urgency was clearly not in line with the Supreme Court’s interim order on the matter in September 2013. Responding to a PIL seeking a stay on the implementation of the Aadhaar scheme, the apex court had ruled that enrolment under Aadhaar was entirely voluntary and not necessary to avail essential government services. LPG undoubtedly fitted into this category. A retired Karnataka High Court judge had filed the PIL, arguing that the scheme infringed on citizens’ fundamental rights under Articles 14 (right to equality) and 21 (right to life and liberty).

Consumers not pressurised

Distributing cylinders to 32,000 consumers in a five-kilometre radius, a gas agency in Marathahalli had been instructed by the parent oil company to collect Aadhaar numbers. “But we were told not to pressurise the consumers. Still, many have come and linked their numbers voluntarily. About 28 per cent of them have done it so far,” says the agency’s proprietor, preferring anonymity.

He admits that many consumers are afraid their subsidy would be cut off if they failed to produce the Aadhaar cards and link their bank accounts. The reason is not tough to find: Besides the warning advertisements and conflicting reports, consumers continue to get SMS messages asking them to rush through the linkage process.

Spearheading a campaign against mandatory Aadhaar cards, the consumer activist group Grahak Shakti alleges that its linkage with LPG is part of a larger motive of boosting UID registrations. “They are far behind the target of 600 million Aadhaar card registrations by March 31. They have not even achieved 20 per cent of that number,” says Somasekhar V K, Managing Trustee of the group.

Wiping out corruption and negating involvement of middlemen was the theoretical basis for Aadhaar-linked LPG distribution. Somasekhar questions this logic, contending that a complicated process would instead only promote corruption. “Any improvement over an existing system should be simple. Since Aadhaar linkage makes it complex, third parties will start demanding more money to supply the gas.”

He cites the case of a software engineer in VV Puram, who had a tough time getting a gas connection recently. “Since he had no Aadhaar card, the authorities demanded Rs 10,000. When we intervened and spoke to the regional manager of the gas distribution agency, the amount was reduced to Rs 3,500 but he could have only one cylinder,” recalls the activist.

But the Unique Identification Authority of India (UIDAI) asserts that the Aadhaar card is the best way to weed out graft. Here’s how an UIDAI official explains it in response to an email query: “LPG is sold by the government at a highly subsidized price. Linking of Aadhaar with LPG connections is an attempt to reduce the misuse of LPG subsidy by weeding out ghost connections (connections that have been issued to non-existent persons) and duplicate connections (one person having more than one LPG connection).”

The official argues that once such connections are identified, they can be weeded out resulting in an overall savings in LPG subsidy. “The intention is not to deny subsidy to the genuine consumer but to ensure that subsidy is not misused by who are not entitled to it.”

Paying full amount upfront

Middle class families might eventually get into the full-payment first, subsidy later mode. But for BPL families with monthly incomes below Rs. 5,000 or even less, the full amount option could get taxing. UIDAI officials, while reiterating that the full-cost-upfront payment will eliminate the dealer’s incentive to sell the cylinder in the black market, talk about a “permanent advance.”

Here’s what it means, as explained by UIDAI: “Once the linking of Aadhaar number with Bank Account and Consumer Number is done, a permanent advance is credited to the consumer’s account to enable him or her to pay the full cost of the cylinder to the dealer. Thereafter, every time the consumer books a cylinder, the subsidy gets directly credited to his / her bank account. Since the subsidy is credited in advance, the consumer does not face any hardship in paying the full cost of the LPG cylinder to the dealer.” In effect, a financially stressed consumer would have to withdraw the advance amount from the bank before keeping the full cost ready for payment every month.

LPG distributors reiterate that once the linkage is done, the subsidy amount will be deposited in the consumer’s bank account within six to 10 days. However, there could be a problem if the LPG connection and Aadhaar numbers are linked to different bank accounts. Nevertheless, these issues should not bother a consumer if he / she decides not to do the linkage at all.

Option to refuse

Yes, the consumers have that option. At least till January 28, when the next hearing on the DBTL issue is scheduled to begin in the Supreme Court. As Sathyan N.,
Secretary of the All India LPG Distributors’ Federation (Karnataka Circle)
acknowledges, the earlier order by the Union Petroleum Ministry mandating consumers to complete the linkage process in three months cannot be applied till a final verdict by the apex court.

This implies, even though 25 per cent of consumers in gas agencies across the City have produced their Aadhaar numbers, the others needn’t rush through the process. Simply put, linking your Aadhaar number with consumer number and bank account is not compulsory.

So, till there is more clarity on the issue, no agency has the option to refuse subsidised cylinders to consumers without an Aadhaar number. However, market rates will be charged if the quota exceeds nine per connection. Since Congress vice-president Rahul Gandhi and others from the Oil Ministry have recently voiced the need to raise this number, the quota is likely to go up to 12 cylinders a year.