The Telegraph
Friday , January 31 , 2014
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Cabinet cooks kitchen comfort

New Delhi, Jan. 30: The government today put on hold the transfer of cooking gas subsidy directly into a consumer’s bank account using the Aadhaar platform, while increasing the quota of subsidised LPG cylinders per household to 12 from nine a year.

“This (putting on hold direct benefit transfer for LPG) is in view of the ground realities and the sentiments that there is a lot of inconvenience with getting the subsidy (through Aadhaar-linked bank accounts),” oil minister M. Veerappa Moily said after a meeting of the Cabinet Committee on Political Affairs.

“A committee has been formed to look into themů till the committee submits its report the old system of consumers paying the subsidised price would be followed,” he said.

Moily, however, did not give details of either the committee or the time frame set for it to submit its report.

The government has been receiving complaints about consumers not getting the benefit in the absence of either an Aadhaar card or a bank account linked to Aadhaar.

Also, in an interim order, the Supreme Court had said Aadhaar could not be made mandatory for people to get government services as it was a voluntary scheme.

While a subsidised LPG cylinder in Calcutta costs Rs 416, a non-subsidised cylinder comes at a market rate of Rs 1,270.

Delay, or non-receipt, of subsidy after paying the market price for a cylinder has affected household budgets and led to a spate of protests. Going back to the earlier regime for the time being will solve most of the consumers’ problems.

In the same spirit of making life easy for Indian households, the government has decided to increase the quota of subsidised cylinders per household to 12.

In this fiscal, households will be entitled to two more subsidised cylinders over the existing quota of nine — one each in February and March. If customers have not used up their quota of nine cylinders, they will still get two more this year. For example, if someone has used only seven cylinders this year, the person can buy two more in February and March at subsidised rates.

From the next fiscal, consumers will be entitled to 12 cylinders — but only one cylinder a month at subsidised rates. According to the new norms, a household can’t use up 12 cylinders in nine months.

Asked if consumers can avail themselves of another refill if they exhaust the monthly entitlement before the expiry of 30 days, information and broadcasting minister Manish Tewari said the government will see how the one-cylinder-a-month scheme worked out and fine-tune it if consumers faced any difficulty.

Moily said raising the quota of subsidised LPG will cost the government Rs 5,000 crore in additional subsidy annually. With the cap at 12, about 97 per cent of consumers will be covered by subsidised LPG.

Direct transfer details

Tewari today clarified that only the direct transfer of cooking gas subsidy had been put on hold. The scheme will continue for other welfare payments such as scholarships, Janani Suraksha Yojana, Indira Awas Yojana, unemployment assistance and payment of pension and wages for work under MGNREGA that were started on January 1, 2013.

Under the direct benefit transfer for LPG scheme, consumers in as many as 289 of 640 districts in the country were supposed to get the subsidy in their bank accounts.

Following the suspension of the scheme, the government will pay subsidy to oil companies and the consumer will get subsidised cooking gas from the oil companies.

The move by the cabinet is being seen as a blow to the UPA government’s game changer scheme of transferring subsidy directly to the beneficiary to plug diversions.

Moily, however, said, “It is not an admission of failure on the part of the scheme and we are quite proud and happy that this programme has gone on very well. Even if there is a marginal error, we need to correct it. We don’t want to proceed further so we have to go back on the reforms measure.”

SC effect?

Asked if the review of the scheme was in view of the Supreme Court’s observation, Tewari said, the court was adjudicating in the matter. It would be inappropriate to comment on sub-judice matter, he added.

The Supreme Court in its interim order in September had ruled that Aadhaar could not be made mandatory for people to get government services and nobody should be deprived of any facilities for want of the card.

The court had asked government agencies and states to reply to petitions that questioned why the Aadhaar programme should continue in the absence of a law.

The court had said, “No person should suffer for not getting the Aadhaar card in spite of the fact that some authority had issued a circular making it mandatory... when any person applies for Aadhaar card voluntarily, it may be checked whether that person is entitled under the law and it should not be given to any illegal immigrant.”