Aadhaar is Compulsory for LPG Cylinder Cash Subsidy Scheme

As part of implementing its ambitious Direct Benefit Transfer (DBT) Scheme, the government is pushing for Aadhaar enabled bank accounts for all beneficiaries. RBI has asked banks across the country to proactively open large number of bank accounts and seed them with Aadhaar number of the account holder.

So far Cash Subsidy Scheme on LPG cylinders under Direct Benefit Transfer has taken off in 18 districts in Andhra Pradesh, Daman and Diu, Goa, Himachal Pradesh, Karnataka, Kerala, Maharashtra, Punducherry, Punjab and Madhya Pradesh. DBT is being extended to some more districts from 1 July 2013. These are areas with high Aadhaar penetration. Although Cash Subsidy on LPG cylinders have been passed on from June 2013 to those with bank accounts not integrated with their Aadhaar number in 18 districts nation-wide, the government has given them 3 months' time to do so. From September they will not continue to get subsidy benefit without Aadhaar seeded bank account and will have to buy the cylinders at market price.

Under Direct Benefit Transfer for LPG (DBTL), consumers with Aadhaar linked bank account will get Rs 435 credited in their account as they book their LPG cylinder. They can then buy the cylinder at market rate, which is about double the subsidy amount. On delivery of the first subsidized cylinder the next subsidy amount will get credited to their account. Each consumer with domestic LPG connection gets 9 subsidized cylinders a financial year as per government's subsidy program. DBTL is being managed by Ministry of Petroleum and Natural Gas, Ministry of Finance and UIDAI.

Prior to introducing Cash Subsidy in LPG cylinder consumers could buy their quota of subsidized cylinders from LPG dealers themselves. However many of these were being sold in black to non-beneficiaries like restaurants and other commercial entities.

Direct Benefit Transfer was envisaged to curb the menace of government social benefits being leaked to non-beneficiaries by directly transferring the value of subsidy to the beneficiary's account. The problem of fake identities would be eliminated through Aadhaar, which is unique for every resident of the country.

DBT is planned to be rolled out in all districts of the country by 2013 end. However banks are less than enthusiastic about opening new Aadhaar linked accounts or seeding Aadhaar in existing accounts since they see no incentive to do so. Unless balances are maintained in the account they would not make profit out of the exercise. Yet RBI in a recent meeting of top bank officials urged them to complete the exercise in all DBT districts and take the help of LPG dealers for doing so.

It is planned to establish DBT for more social benefit schemes like NREGA, scholarship and pension. Once Aadhaar is covered in majority of states the government could increase its scope to apply to all identity based transactions in the country.

If you are an LPG consumer with Aadhaar number you can link your Aadhaar number to LPG consumer number by submitting details online at https://rasf.uidai.gov.in/seeding/User/ResidentSplash.aspx or if have submitted the form to your dealer you can check Aadhaar Linking Status at dealer's transparency portal through http://petroleum.nic.in/dbtl/linkstatus.html

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