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Rediff News  All News  » Business » Aadhaar-linked gas subsidy caught in legal tangle

Aadhaar-linked gas subsidy caught in legal tangle

July 31, 2014 12:32 IST

LPG cylindersPetroleum Minister Dharmendra Pradhan may be rooting for Aadhaar-linked cash transfer of subsidies for cooking gas, but a case in the Supreme Court poses a hurdle in reviving the project.

According to officials aware of the matter, restarting the project could mean inviting the court's 'contempt' as the case -- in which the Supreme Court has held that biometric identification cannot be a criterion for a citizen's access to welfare -- has still not been closed yet.

However, they argue the infrastructure for cash transfers in 292 districts is in place and all they need to do is switch it on.

Over Rs 5,000 crore (Rs 50 billion) of the cooking gas subsidy was transferred in cash before the scheme was put on hold.

The government could have saved over Rs 11,000 crore in subsidy and interest costs had the scheme been kept alive.

Cash transfers are expected to save the exchequer around a fifth of the Rs 46,000 crore (Rs 460 billion) cooking gas subsidy each year.

"There are so many imponderables, including the court case and the views of the finance ministry and Planning Commission.

Unless there is clarity on the modifications required, if any, there is little we can do," said a senior official close to the implementation of the scheme who did not wish to be named.

Experts say the government has the option of introducing a law in parliament so that the court's decision becomes irrelevant.

The absence of any legislative backing is a major irritant for the scheme.

Alternatively, the government could ask the court to allow the scheme to run for cooking gas while it looks at the issue of citizenship separately. The Supreme Court had last September dealt upended the United Progressive Alliance's showpiece welfare reform by ruling biometric IDs could only be issued to Indian nationals and could be made mandatory for accessing public services or subsidies.

The government recently expanded Aadhaar's role to cover four new states, including the populous Uttar Pradesh and Bihar.

"We have rolled out Aadhaar numbers to 90 million people in 292 districts.

"We hope the number will cross 160 million once these four states are covered," said the official quoted above, adding the dispensation on Aadhaar within the government was 'far more positive' now than before the general election.

Surabhi Agarwal and Sudheer Pal Singh in New Delhi