LPG Direct Benefits Transfer Facts

The debate over Aadhaar in the Supreme Court it seems has had its share of unintended consequences. While the matter is sub-judice it would be in order to note that the debate on Aadhaar, its Legislative legitimacy and its privacy implications is a debate that has nothing to do with whether Direct Benefits Transfer of Subsidies in India is working or not working.

Yet how does one explain this skulduggery in the Indian Express on LPG Subsidy Direct Transfer using Aadhaar ?

The certitude with which the Headline screams –

“Centre’s savings not more than Rs 143 cr, while it claims Rs 12,700 cr”

would make one think that the Indian Express has hard data or an expose or a RTI to back up its claim. Instead here is what we get from the Indian Express:

Our calculations suggest that the savings from DBTL in the last fiscal year are likely to be large overestimates. It is important that precise savings figures are presented by the government so that an accurate appraisal of DBTL as a policy can be made

So the Indian Express wants the government to “share precise data” so an “accurate appraisal” can be done but never mind the certitude with which the headline screams “your numbers are wrong”.

It is stupefying that the Indian Express would go to such lengths to trash the direct benefits transfer savings figure that it relied on the work of a Lefitst International NGO that has not even made an attempt to disguise its real motive behind the study:

ISD’s Clarke agrees with the claims that DBTL has done little to enhance access of LPG for poor and vulnerable consumers. “It (DBTL) also doesn’t tackle the significant administrative hurdles faced by the poor to gaining registered LPG connections, and therefore LPG subsidies.”

In fact the Indian Express gives the game away with its closing sentence and the odd quote attributed to an IIT Delhi Prof on the real motive behind the piece:

The massive anomaly in government’s claims comes to light just as Supreme Court is scheduled to decide on the use of UID for PDS on October 7

Reetika Khera, professor at IIT Delhi ….. “There has been no serious analysis of the benefits and cost of the UID project”

It is puzzling that the anti-Aadhaar lobby instead of battling out the real issue in Supreme Court on Legislative legitimacy and Privacy, instead chose to do a hitjob on direct benefits transfer of the LPG Subsidy.

So what are the facts of the savings from DBT for LPG

According to Ministry sources the basis for the  13,000 to 15,000 crores figure for savings is as follows:

  • Over 3 crore consumers have been blocked as a result of de-duplication/dormancy under the PAHAL scheme after a long window to register themselves.
  • The average subsidy granted from April 14 to July 15 comes out to be Rs 425/cylinder . Rs 425 for a cylinder for 12 cylinders for 3 crore consumers comes out to be close to 15,500 crore.

The big picture in terms of Aadhaar linkage and those not availing subsidy is as follows:

  • As of the beginning of this month there were close to 8 crore consumers availing LPG subsidy who had linked their Aadhaar for direct transfer
  • Over 3 million consumers having given up their subsidy while nearly 2 core consumers are  overall buying non-subsidized LPG
  • The total subsidy transferred to date from the beginning of the pilot in 2013 is in the range of  26,000 crores

It is that 3 crore figure which can also be seen as curbing of leakages and stopping of domestic cylinders being diverted for commercial purposes that is underlying the LPG Subsidy Savings figure on account of direct transfer of benefits using Aadhaar. With merely another 5 crore minority registered consumers who want to avail subsidy but have not yet linked their Aaadhaar, the reality is that the vast majority of consumers have either registered their Aadhaar or have opted to not avail of any subsidy.

Thus it defies logic why the Indian Express would go to such lengths to trash a significant behavioural change by the government that saw a majority of LPG Consumers embracing Aadhaar linked DBT in the absence of hard data to back up its second guessing of the government.