Aadhaar-based cash transfers: Madras HC notice stokes fear of judicial backlash

An earlier version of the scheme had to be stopped after SC observed Aadhaar numbers could not be made mandatory for availing of benefits

The fear of a judicial backlash against the government’s attempt to revive the Aadhaar-linked direct benefits transfer of LPG (DBTL) subsidy returned on Wednesday, with a division Bench of the Madras High Court issuing notices to the cabinet secretary, petroleum secretary and the Oil and Natural Gas Corporation (ONGC) chairman in this regard.

A public interest suit was filed in the Madurai bench of the court, challenging the central government’s move to link Aadhaar and bank account details with domestic gas cylinder connections, as part of the DBT scheme. The petitioner, Sivakasi-based advocate S M Anantha Murugan, called for restraining the scheme as the Supreme Court had earlier restrained oil companies from demanding Aadhaar card numbers for liquefied petroleum gas (LPG) cylinders.

Business Standard had on October 28 reported that Solicitor-General Ranjit Kumar had advised against resuming cash transfers in cooking gas without taking the Supreme Court’s approval. The government should first place the report of a committee appointed to study the scheme before the court and seek a modification in its ruling, he had advised. A senior petroleum ministry official had recently said the ministry would approach the court if the need arose. An earlier version of the scheme was rolled out by the previous government in June last year which had to be stopped after the Supreme Court observed Aadhaar numbers could not be made mandatory for availing of benefits from the government. The scheme had already been rolled out in 292 districts by then and the government had transacted via Aadhaar about Rs 5,000 crore to beneficiaries.

A modified version of the DBT scheme was launched by the new government in 54 districts across 11 states, covering 23.3 million households, on November 15, to reduce diversion of subsidised domestic cooking gas. The new scheme does not make an Aadhaar number mandatory. Currently, the Aadhaar generation level in the 54 chosen districts stands at 95 per cent. Under the new scheme, consumers without Aadhaar numbers can receive cash directly in their bank accounts. However, they may have to shift to an Aadhaar-based cash transfer system when they get their Aadhaar numbers. Also, consumers not cash transfer-compliant (CTC) get a three-month grace period, during which they receive the cylinders at a subsidised rate.

To ensure LPG consumers have extra cash to pay for the first LPG cylinder at market price, a permanent advance is to be paid to them as soon as they make their first cylinder booking after joining the scheme.