LPG subsidy flow stops after credits to Airtel accounts

Beneficiaries say unaware that sops were paid to payments bank accounts

Waseem Khan, a resident of Faizabad in Uttar Pradesh, is among the 3.72 million beneficiaries facing difficulties in getting a domestic gas subsidy in their bank accounts. Khan claimed his family has not received any subsidy for the past few months despite having provided his Aadhaar and bank account numbers to the local gas supplier.

Officials in the Ministry of Petroleum and Natural Gas admitted that there was a problem of delayed payments to beneficiaries. “About 3.72 million consumers are facing problems related to the subsidy as a large number of them are unaware of their newly opened accounts with Airtel Payments Bank,” said an oil marketing company official.

The official alleged that Airtel Payments Bank opened new accounts for their mobile phone subscribers without their “informed consent”. These subscribers had visited the Airtel outlets for Aadhaar-based SIM verification.

According to the current practice, cooking gas subsidy is paid into the newly opened account. “According to rules, the LPG (liquefied petroleum gas) subsidy is transferred to the (latest) bank account of the beneficiary that has been seeded with his Aadhaar,” a government official said. “But we understand that about 3.72 million consumers are getting a subsidy in their Airtel bank accounts, which they don’t seem to have opened. But from our side, that money has already been disbursed.”

In the three-month period, the bank had done 9.5 million subsidy-related transactions. An amount of Rs 167 crore was deposited as subsidy in these 3.7 million accounts, against Rs 68.33 crore of deposits that Airtel Payments Bank reported at the end of FY17, which was its first year of operation. This is even after the ministry of petroleum had approached the department of financial services, under the finance ministry, asking that such accounts be de-seeded from subsidy disbursements. 

“We estimate that around Rs 167-crore subsidy of the past three months (September, October and November) is lying in these Airtel payment accounts,” added the oil marketing company official.

Following a complaint by the Ministry of Petroleum and Natural Gas, the Unique Identification Authority of India (UIDAI) initiated a probe against Bharti Airtel for allegedly opening payments bank accounts of its subscribers without consent. Bharti Airtel has been asked to explain why a financial penalty should not be imposed on it for violating Aadhaar rules. Following this, the UIDAI on Saturday temporarily barred Bharti Airtel and Airtel Payments Bank from conducting Aadhaar-based SIM verification. 

An Airtel spokesperson told Business Standard it has responded to the UIDAI. Airtel Payments Bank was fully compliant with all guidelines and followed a stringent customer on-boarding process. “The re-verification for mobile phones and the opening of Airtel Payments Bank accounts are completely separate transactions and not linked. All Airtel Payments Bank accounts are opened only after explicit consent from customers. A separate consent for direct benefits transfer (DBT) is taken from all customers,” the company spokesperson said.

The company also clarified the customers were duly notified about the subsidy credit via SMS and an automated call (available in 12 languages), saying: “The govt. subsidy of Rs X has been credited to your Airtel Payments Bank Account”. The customers were also informed when any interest amount was credited. “The balance in Airtel Payments Bank savings accounts can be withdrawn by customers at any Airtel Store or transferred to any bank account. There are no charges for DBT withdrawal and neither are there any charges for opening, maintaining or closing of accounts,” the spokesperson said.

The Union government had re-launched its ambitious direct benefit transfer in LPG (DBTL) scheme PAHAL (Pratyaksh Hanstantrit Labh) in 54 districts on November 15, 2014. It was rolled out in 622 districts on January 1, 2015. The objective of the scheme was to prevent subsidy diversion and to help genuine customers using LPG for domestic cooking get subsidy. It was also alleged that the petroleum and gas companies were not providing benefits to genuine customers.

Government officials said before the launch of the scheme, there were around 195 million domestic gas consumers in the country. Around 35 million gas connections were found to be fake after consumers linked their Aadhaar with their respective LPG customer numbers. Another 10 million was said to have opted out of the subsidy scheme under the government’s Give Up campaign. 

As of November, India has around 251.1 million domestic LPG consumers. Of this, 121.2 million are with Indian Oil Corporation, 64 million with Bharat Petroleum Corporation, and 65.9 million with Hindustan Petroleum Corporation. The Narendra Modi government has been successful in adding another 31.6 million below-poverty-line customers through its flagship social sector scheme, Pradhan Mantri Ujjwala Yojana.