Govt explores direct cash transfer without UID
A UIDAI official said that a final decision has not been made on the matter
First Published: Mon, Oct 22 2012. 12 44 AM IST
New Delhi: The government may directly transfer cash subsidies to even those domestic cooking gas connection holders who don’t possess Aadhaar numbers—a position the Unique Identification Authority of India (UIDAI) doesn’t agree with.
UIDAI issues the Aadhaar numbers that will give each resident Indian a unique digital identity, around which the government is planning a host of welfare schemes.
The decision on the cash transfers was made at a meeting called byPulok Chatterjee, principal secretary to Prime Minister Manmohan Singh, earlier this month to expedite the process.
UIDAI officials at the meeting opposed the move but it was decided that direct cash transfers couldn’t wait for the Aadhaar numbers to be issued to all. So far, 200 million people have been issued Aadhar numbers, or about 16% of India’s population.
A UIDAI official said that a final decision has not been made and a committee was formed of joint secretaries to compile different views and submit a report by 16-17 October. The report has been submitted and UIDAI has said that it can meet the deadline of LPG subsidy cash transfers by January 2013 in 51 districts and in 18 states (where UIDAI is mandated to enrol people) by April.
“While UIDAI has high penetration in 50 districts where Aadhaar numbers have been issued, there the cash transfers will be made only through UIDAI-linked bank accounts. For other places where Aadhaar numbers have not been issued, one can’t indefinitely wait,” said a petroleum ministry official, requesting anonymity.
A pilot scheme is already on in one district to examine the feasibility of transferring cash subsidies in this manner.
The meeting was attended by officials in the ministries of finance, petroleum, home and representatives of UIDAI and the Planning Commission.
The “principal secretary came to the conclusion that keeping in mind all the views that had been expressed, cash transfers need not necessarily wait for Aadhaar numbers to be issued”, show the minutes of the meeting reviewed by Mint. “However, it is preferable that cash transfers are based on Aadhar numbers as and when penetration levels cross 80% as the Aadhaar based system provides multiple benefits.”
The government recently capped the supply of subsidized cooking gas to six cylinders per household per year to pare its subsidy bill. It wants to transfer cash subsidies directly to the bank accounts of the beneficiaries of the various government schemes to ensure the benefits reach the intended target.
UIDAI is mandated to issue 600 million Aadhar numbers by 2014.
“UIDAI’s second phase has already been delayed by five-six months. Our reading to this is that the government is in a tearing hurry to transfer direct cash subsidy to people’s bank accounts because of the uncertain political situation and 2014 general elections,” said another government official who also didn’t want to be identified.
“You have to understand that things can’t be implemented overnight in this country, 51 districts are good enough to start implementation. Theoretically, something may look okay, but you can’t implement something overnight for 10 crore people,” countered a UIDAI official, also requesting anonymity.
There are 140 million LPG connections in the country, of which 99.57% are for domestic use, comprising 14.2kg LPG cylinders, according to official data. The LPG customer population covers around 56% of India’s total. There is an exercise on to eliminate multiple connections, with around 20.6 million such connections already identified.
The department of financial services was of the opinion that “it is better to delink Aadhaar from cash transfers and transfer subsidy by directly having a link between LPG customer databases and bank account databases”, according to the minutes of the meeting.
“What they would be doing in test phase is matching their database with digitized database of National Population Register (NPR). If the data matches, then they would take the account details of the person on whose name gas connection is registered. The difference between the market value and subsidized gas cylinder will be transferred to the bank account,” said the government official quoted above.
UIDAI, chaired by Nandan Nilekani, was set up to assign 12-digit unique identity numbers. But the initiative led to intra-government dispute bringing it in conflict with data collection under the NPR.
The total loss from selling fuels below cost last fiscal year was Rs.1.44 trillion. State-run retailers are compensated by the government for selling diesel, kerosene and cooking gas at fixed prices that are significantly lower than the cost of production.
India subsidizes the prices of most fuels and its annual subsidy bill towards this is expected to be Rs.1.67 trillion this year.
Surabhi Agarwal and Shubham Shivang contributed to this story.
