The government plans
to directly transfer money to the bank accounts of cooking gas customers even
if they do not have Aadhaar identification.The rollout will start with a pilot
project in Andaman and Nicobar Islands by April, and will be extended to the
rest of the country in a year. The oil ministry will also seek Cabinet approval
to end the sale of subsidised kerosene and proposes to transfer cash to the
bank accounts of consumers. The twin proposals will help remove malpractices in
the oil industry - diversion of subsidised cylinders for commercial use and
adulteration of diesel with cheap kerosene - and save the exchequer Rs 15,000
crore a year.
"The plan is to sell all LPG cylinders and kerosene at
market rates by 2013-14 to discourage diversion, and it is possible even
without Aadhaar numbers. All we have to do is to open no-frills bank accounts.
States will be responsible for transfer of subsidy to individual bank accounts.
The matter was discussed in a committee chaired by Prime Minister Manmohan Singh,
but the government deferred an announcement on nextday as it was not sure about
the launch date.
The government initially wanted to begin direct transfer of
subsidies from January 1. But it was later decided that the rollout be done from
April after adequate preparation to avoid the kind of chaos and harassment that
consumers faced when the government suddenly capped the supply of subsidised
LPG cylinders in September.
"The ministry is also considering raising the cap on
subsidised cooking gas cylinders. Six cylinders are not enough... In fact, the
Nandan Nilekani-led task force was not in favour of capping. The task force did
caution against such a move," a senior government official said on the
condition of anonymity. New Oil Minister Veerappa Moily had instructed
officials to raise the cap on cylinders a day before Diwali .
"The ministry did prepare a draft note for the Cabinet,
but lack of funds proved to be the dampener. The proposal has not been
shelved,".
The Nilekani-led task force wanted the government to
transfer cash subsidies to the bank accounts of all customers. In the second
phase, it suggested that subsidies be transferred to only the poor based on
Aadhaar numbers. The task force said in its report that "this step of
capping the subsidised cylinders is not going to serve any of the objectives
for which the task force was set up".
"Due to the new imposed limit on subsidised LPG under
this phase, caution has to be taken as there may be a spurt in new connections
and old, inactive connections may become active. Further, it has the potential
of becoming a hurdle for the next stage of reforms," the task force had
warned. After taking over the oil ministry on October 29, Moily had said that
implementation of direct subsidy on kerosene and LPG would be his top priority.
Direct Transfer of Cash Subsidies on Kerosene 2012 (DTCK-12)
has been launched in 11 states and these have been awarded Rs 100 crore each
for voluntarily accepting it.
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