Yogima Seth Sharma & M Rajshekhar, ET Bureau Jan 31, 2014, 07.09AM IST
NEW DELHI: The government's decision to put the Aadhaar-based direct benefit transfer (DBT) for cooking gas on hold could be a blow to the Unique Identification Authority of India (UIDAI), set up as one of the United Progressive Alliance's flagship initiatives and aimed at ensuring that subsidies reached the right beneficiaries without fraudsters and middlemen ripping them off.
Ahead of elections, the government is at pains not to risk alienating any constituency, having already sustained heavy defeats in recent state elections, some of these in areas where the programme has been rolled out. Oil minister Veerappa Moily attributed the decision on Thursday to complaints about implementation of the scheme.
A committee has been formed to look into them and pending its report, he said, "the Aadhaar-linked LPG subsidy transfer has been put on hold." According to Himanshu, an assistant professor of economics at the Jawaharlal Nehru University School for Social Sciences, "If the government is calling for a pause, it clearly shows they are having a rethink."
The programme to transfer the cooking gas subsidy directly to the bank accounts of users is the biggest linked to the Aadhaar platform thus far. Until now, the only government programmes paired to Aadhaar have been items such as scholarships, which don't have a similar footprint.
The decision disappointed UIDAI officials, although officially the agency played down the development. "Aadhaar is just a platform. It is up to the people and ministries to leverage it for their own services," said Vijay S Madan, director general of UIDAI, adding that the authority will study the decision. "We are yet to get the details of this decision from the ministry of petroleum. It is only after we see the decision (that) we will be able to analyse its impact," he said.
A senior UIDAI official in charge of a north Indian state said, "Enrolments had slowed after the SC (Supreme Court) order. Now they will slow down further." The Supreme Court had said in an interim order that no one can be denied benefits just because they don't have an Aadhaar number. About two weeks ago Congress party vice-president Rahul Gandhi had described the DBT project as the "largest anti-corruption platform that anyone has ever built". It will, he said, enable people to get their benefits and entitlements without paying a bribe. He also said that the Congress party hadn't done enough to get the message about its achievements across to the people, which was partly responsible for its current standing ahead of elections.
Moily didn't mention the Supreme Court order though. Technically, the government was in danger of contempt of court if it insisted on Aadhaar numbers for getting LPG subsidy. Given that, in his address to the party, Gandhi had only criticised the government for capping the number of subsidised cylinders, this suggests the rethink was prompted by the fact that the Congress has not done well in the areas where its DBT programme had been rolled out.
As ET reported on Tuesday, in assembly elections late last year in Rajasthan, the Congress fared dismally in the three districts - Ajmer, Alwar and Udaipur -- where DBT had been rolled out in January 2013. Of the 27 seats on offer, the Congress won just two. The DBT-LPG programme itself is running into other, more unique problems. "There are problems with the seeding," said an IAS official tracking DBT-LPG implementation. "Incorrect Aadhaar numbers have been entered into bank databases, addresses are incorrect."
Delays in Aadhaar registration, including Aadhaar numbers in bank databases and last-mile problems in financial access were among the reasons for the DBT programme not succeeding as envisaged. However, the government's decision hasn't come as a surprise to experts who feel this should have been expected. "It was premature on the part of the government to have announced the rollout of LPG subsidy under DBT without having a proper implementation system in place," said Kalpana Jain, senior director of Deloitte, adding that the concept was sound but implementation was inadequate.
DK Joshi, chief economist of Crisil, also wasn't surprised. "Problems already existed from the beginning and this was anticipated since all beneficiaries were not on board," he said, adding that the government needs to accelerate the process of enrollment and seeding before it re-introduces the programme. Until last month, consumers in as many as 289 districts in 18 states were getting a subsidy of Rs435 in their accounts for an LPG cylinder they bought at market price.
