Restarting DBT might first need SC nod

Solicitor-General seems to have also thought so, given an earlier direction that Aadhaar could not be made mandatory to get the subsidy

The government might have rushed the announcement, against cautious legal advice, on re-starting cash subsidy transfers for cooking gas (LPG).

The problem stems from a Supreme Court (SC) order that the Aadhaar (Unique Identification) number should not be mandatory for availing of government services.

Since Direct Benefits Transfer (DBT) in LPG had required a mandatory linkage of the Unique Identity number, a petition was filed by a former MLA, alleging contempt of court.

In response, the government had informed the SC that the scheme had been put into abeyance.

“This is why it will have to go to the court once again,” an official said, adding “perhaps the government should not have hurried this up (the announcement).”

The solicitor general, Ranjit Kumar, had in fact advised against implementing the project before taking the SC approval. Yet, on Saturday, the Cabinet said a modified version of the DBT scheme in cooking gas would begin from mid-November in 54 districts, and in the rest of the country by January.

The government had earlier sought the opinion of the solicitor general on re-starting the project, frozen by the former government in January. In a letter dated September 11, Kumar warned that restarting work on the scheme “may invite the court’s contempt”.

The government should first place the report of the committee appointed to study the project (headed by former Indian Institute of Technology director Sanjay Dhande) before the SC and seek an amendment to the court’s order, it was advised.

Business Standard has reviewed a copy of the letter.

It should be noted, though, that the government has only announced its intent to restart the project. Actual implementation is a month away.

A government official said the Centre was likely to approach the Court over the coming weeks and was “hopeful” of an okay to the modified version before mid-November. Another official said the government might not have to take SC permission for a re-launch but it would still keep the court “informed”. The court had said Aadhaar would not be mandatory for entitlement schemes, the second official said.

“We have done the same thing. We are saying the consumer will get LPG supply entitlement whether or not he/she has Aadhaar,” the official added.

Ground-level implementation challenges were cited as the main reason by the previous government for putting the scheme on hold. It had also formed a 12-member panel for a course correction.

The committee gave its report in May, suggesting the project was beneficial for containing subsidies. Before it was put in abeyance, DBT in LPG was operational in 290 districts and Rs 5,000 crore of subsidy had been transferred directly into the Aadhaar-linked bank accounts of consumers.

The modified scheme will only start, as noted earlier, in 54 districts in the first phase. These have been chosen based on high penetration of Aadhaar numbers and its seeding with bank accounts.