Move comes after it became evident that absence of bank accounts linked to Aadhaar numbers could act as a hurdle for direct benefits transfer scheme
First Published: Thu, Aug 22 2013. 04 13 PM IST
A file photo of people registering for Aadhaar card in New Delhi. Photo: Ramesh Pathania/Mint
Updated: Thu, Aug 22 2013. 04 57 PM IST
New Delhi: The government has set a 30 August deadline for banks to match the coverage of Aadhaar in the 20 districts where it has rolled out the direct transfer of cooking gas subsidy, but bankers said the deadline would likely be missed.
The move comes after it became evident that the absence of bank accounts linked to Aadhaar identification numbers issued by the Unique Identification Authority of India (UIDAI) could act as a hurdle in the implementation of the so-called direct benefits transfer programme of the government—one of the Congress’ major talking points in coming state and general elections.
Starting 1 September, in the 20 districts where the scheme has been rolled out, customers will have no option but to pay market price for cooking gas and be reimbursed a subsidy through a transfer to their Aadhaar-linked bank accounts. Now, customers who haven’t had their bank accounts linked with Aadhaar numbers have the option of getting subsidized cylinders from dealers.
Bank executives who spoke on the condition of anonymity said the process would likely stabilize well after the deadline expires for consumers, which means that they will have to buy cooking gas cylinders at the market price. The officials blamed part of the problem on infrastructural and procedural issues and the other part on the tendency of customers to not do anything till the deadline for it expired.
A government official who asked not to be identified said the government would take stock of the situation on 30 August.
The bank executives, all district-level bank supervisors, blamed shortage of manpower, incomplete data from oil marketers and issues such as names in Aadhaar-linked database and bank accounts not matching. They also added that many consumers interested to receive the subsidy will approach banks only when cylinders are available only at market price.
“We have been at it, trying to push seeding to Aadhaar penetration levels, but customers will dash to the banks when the subsidized cylinders stop and they feel the pinch,” said one bank executive from a southern district where the LPG benefits transfer began on 1 June. In that district, 74% beneficiaries have their Aadhaar numbers and 49% of accounts have been linked, this person added.
Indeed, all 20 districts chosen for the pilot of the scheme, because of the high Aadhaar penetration in them, have fared badly in terms of linking bank accounts to the unique IDs.
On 26 July, the finance ministry wrote to banks pointing out that the linking of consumer accounts with Aadhaar numbers has been unsatisfactory.
“... to facilitate smooth direct benefit transfer of subsidy to the LPG consumers you may take such necessary steps to ensure that respective bank functionaries obtain Aadhaar number from the customers directly and seed them into the bank accounts without waiting for the Oil Marketing Companies (OMCs) to provide the requisite database of Aadhaar,” the letter said.
A second government official who also did not want to be identified blamed the banks and said they started their linking efforts much after the 1 June start of the scheme in the 20 districts.
“Thirty-five more districts are set to be added from 1 September, but banks have not started doing anything much to get bank accounts seeded,” the official added.
The head of a state-run oil marketer said on 10 August that banks have not been doing their bit. He declined to be named.
To be sure, the linking of bank accounts and Aadhaar numbers has worked far better in the case of cooking gas cylinders than it has for other schemes under the direct benefits transfer programme.
In a 16 August answer to a Parliament question, the finance ministry said only 9.62% of beneficiary accounts for the other schemes under the programme were linked to Aadhaar.
Utpal Bhaskar contributed to this story.