June5, 2013... Deccan Herald
This is a discussion that took place between me and one of the authors of an article on aadhaar-DBT linkage. Here is the link to the article:
I am posting till where we went in the discussions. Another of my reply to the last comment has been deleted by the site moderators so I am posting in my blog.
I know some people having many gas connections. They take excess cylinders from agencies and supply to commercial establishments. Even with aadhaar nothing stops a person from getting another connection in his wife's name. DBT for LPG will cause little hardship to the housewife as she needs to keep aside higher sum for cylinder purchase. However diversion will reduce because the cylinders will be sold at market rates to consumers. If agency fellow gets same amount selling to consumer or hotel then there is no benefit in diversion.
I completely disagree with the following
"To siphon LPG subsidy(In the old/present system), the LPG cylinder would have to be supplied to an ineligible (non-domestic) customer who would then pay the subsidy amount to the eligible customer in whose name the connection exists and the
The whole point in my article could be summarised as follows.
1. LPG customers and their consumption pattern of subsidised cylinders could be determined by linkage to presently available customer number (and address). There is no need for any other number, such as electric meter number of UID number. (The people you "know having many gas cylinders" would have many customer numbers with the same address where the cylinders are delivered.) How cylinders do they have? Would such cylinders add up to 375 million per annum? Are these used for commercial purposes? If so they have to be delivered at a commercial establishment. Connivance of distributer / delivery person is required for this.
2. Crediting subsidy into bank accounts would not prevent use of the subsidised cylinder for commercial purposes.
3. LPG subsidies cannot be siphoned off in cash unless the cylinders are sold. The "ineligible" persons are those who have many cylinders who are not eligible for more than one connection and two cylinders for this connection.
Please read the article carefully to understand the above.
Could you please say how UID numbers and subsidy transferred into bank accounts would prevent misuse of subsidised LPG cylinders?
Hi Sir, I agree to all points you have mentioned to some extent. The truth lies somewhere in the middle...Even i have some points which looks at the other side of the story.
1) There is collusion between agencies and hotels:
Some agency delivery boys deliver subsidized cylinders to hotels directly or after pilfering(This cannot be controlled in a systemic way without DBT). Our area infact had an illegal bottling plant where subsidized cylinders were pilfered and commercial cylinders were filled.
2) DBT will stop direct collusion:
What DBT will do is stop direct collusion between agency and hotels and give scope for collusion between domestic consumers and hotels(Less likely and limited by the cap). I agree crediting subsidy into bank accounts would not prevent diversion(It prevents collusion between agency and hotels).
3) Reduced benami connections and upper limit on diversion:
One thing that will happen and i am sure you will also agree to this, is that due to the 9 cylinder cap and linking connections to aadhaar benami accounts will reduce(Due to linking) and diversion will reduce(Due to cap). With steps taken for KYC, diversion has already reduced. The additional benefit of DBT over this is given by the next point.
4) Since nearly 30-40% people are reluctant to link aadhaar number with bank account fearing taxmen they will loose LPG subsidy benefit. So corrupt tax evaders/ultra rich privacy advocates will not get LPG benefit. Very rich people earlier had no option but to accept the subsidy. This can also be called as savings.
Considering your idea about uniqueness of addresses, can't two addresses spelt differently refer to the same place or dwelling unit????
I thank you for agreeing with points made by me.
1. How will DBT control collusion between Delivery boys and hotel owners? DBT merely credits the subsidy into the bank account of a genuine customer. The subsidised cylinder could still be delivered anywhere. It is the misuse of the cylinder, which is the problem not the subsidy. Do you think that the siphoning of subsidies of this magnitude is done at the level of delivery boys?
2. If DBT will NOT stop diversion of the cylinder, how ill it stop collusion between agency and hotels? How will DBT stop collusion between these two? Please elaborate.
3. How does DBT or UID numbers reduce benami connections? In what way is UID number superior to existing customer number or the electric meter number that was tried sometime back in Karnataka and given up? Cannot the oil company monitor the number of cylinders consumed against a customer number (upper limit) as well as against UID numbers?
4. If UID / Aadhaar is meant to detect tax evasion, why does not UIDAI and Government say so? Why pretend that it is only for targeted welfare? RBI regulations stipulate that any deposit of cash beyond Rs. 50,000 is not permissible. High value cheque deposits are to be reported to RBI (Income tax). How did Madhu Koda, for example, send out Rs. 4000 Crores? How do you think tax evaders have black money in tax havens? Who are these people? Why is the government not acting against them? If those who are to act against tax evaders take no action now, how do you think that once UID numbers are linked to bank accounts, tax evasion will stop?
5. A person may have any number of houses and addresses. They need not be spelt differently. If one who owns two or more houses has more than one LPG connection, one for each house, how would UID detect this? If UID number can be used to detect such fraud, why can’t customer number be used in the same way?
Sorry for late reply... Space considerations make my reply short...
1) Earlier delivery boy was supposed to collect 410 from domestic cons. and 850 from commercial cons(Assume). He was making fake bookings for domestic cons. and delivering to commercial cons. Now he will collect same amount of 850 from everyone. Commercial cylinder rates of 1400 per 19.6 kg cylinder need to be brought down to 1100. Per kg cost difference for domestic and commercial is 60(850/14.2) and 71(1400/19.6) respectively.
2) Point number 1 will stop collusion.
3) Aadhaar cannot be issued to non-existent person so linking gas consumer number to aadhaar will reduce benami connections. Point number 3 makes it superior.
4) It is a carrot and stick approach and govt wants to dangle the carrot before the cart so that it moves a little and later it can use the stick. Goodwill needs to be generated hence carrot first.
5) UID would detect it simply because the person is same. He can't link both gas connections with same aadhaar number. He can't get two aadhaars for doing that.
1. Point No. 1 & 2: You say, “He was making fake bookings for domestic consumers and delivering to commercial consumers. ----- Now he will collect same amount 850 from everyone.” This is your first point. Then you say in point 2 “Point 1 will stop collusion” (between delivery boys and hotel owners). If the delivery boy collects Rs. 850 from the hotel where he delivers the cylinder and the DBT goes into the bank account of the domestic consumer the subsidy (Rs. 850 – Rs. 410 = Rs. 440) “leaks” into this account and the subsidised cylinder is used for commercial purpose.
2. “Aadhaar” is for ALL RESIDENTS. Subsidies are for citizens. Hence, resident non-citizens could obtain subsidies. Data of over 14 Lakhs people in AP data of all people in Delhi who registered before 2010 and data of over 10 Lakh people in Maharashtra has been lost. Don’t you think that some of this could be used for creating fake IDs for LPG customers? UIDAI’s EAs have been caught making fake IDs. A FIR is filed in Bangalore. Fingerprints could be easily faked. UID number is NOT superior to customer number, since the number of cylinders consumed would reveal whether they are put to commercial use or not. A domestic consumer will usually use about 9 cylinders a year. This is the limit fixed now. As per Oil Company norms you cannot book a cylinder within 21 days of the receipt of the previous cylinder.
3. Your Point 4: What is the “carrot”? Firstly, carrot is dangled not before carts, but in front of donkeys (in the proverb)! Are you suggesting that the Govt is (and should) treat people like they were donkeys? What is the “stick” that you imagine will come later?
4. On your Point No. 5, please send a RTI query to UIDAI and ask them how many duplicate IDs they have detected so far and you will see the stupidity of the UID scheme.
6. What happens when two families live at the same address and have two kitchens? How would UID stop politicians and the oil mafia from forcing Oil Companies to divert LPG in tanker loads for commercial use and accounting for the same against consumers who although they have connections do not consumer cylinders, since they have gone away for long periods? The subsidy need not be claimed through DBT, but the LPG is misused.
1. Yes the subsidy goes into the account of the domestic gas consumer and he can’t be cheated of his share of subsidy for consuming gas. This assumes that a consumer of gas indeed needs gas and will consume it. We cannot do anything to a poor person who takes gas connection and diverts gas cylinders to hotels and makes do with kerosene stove. Such people will indeed benefit and you can say subsidy leaks. The difference is it leaks to the consumer and not gas delivery boy.
2. Aadhaar is for all residents. Subsidy is for citizens. This is a call the government has to take. I agree with you in saying that we need to find out who are those non-citizens who have aadhaar numbers who are benefiting. Their aadhaar number should be cancelled. Yes fake IDs can be created to claim benefits but this can be detected. Diversion of cylinders has already reduced a lot by the steps you mentioned.
3. Carrot is the subsidies and stick is the denial of subsidies to the rich. Donkeys are the people. It is better to treat people as donkeys since they respond by working hard. If you keep supplying them with free food they behave like rats and multiply.
4. Duplicate IDs were a result of several factors. Same pen drive containing enrolment records might have been used two times to load the same records twice. Two distinct persons might have been flagged as duplicates by an error in matching records. Real duplicates might have gone through and given two aadhaars. Finally real duplicates might have been accurately caught. The strictness with which matching is done, if it is more, two distinct persons start getting classified as duplicates and if strictness is less real duplicates go through. I tried my best explaining without terms such as FPIR,FNIR etc. Mr. Thomas you are deliberately trying to mislead the country. Duplicates which have gone through as distinct aadhaar are less than 1 lakh for entire country of 124 crore. Only one such case has come in media. This is an accuracy unmatched by any other technology.
5. I see that you have given up on point number 5. Deliberately trying to mislead people by hook or by crook. So invent a few more such silly ruse.
6. Very rarely do two families living in same place have two kitchens. Gas agencies do allow two connections to the same house address. I am sure there will be two different heads for the two families and they can link their connections to two different aadhaar numbers. Gas tankers used to be priced at subsidized rate earlier times. If now tankers move at market rates subsidy has to go into many different accounts. Not a single politician’s account. And another thing is gas booking is completely computerized now and fake bookings are nonexistent. You cannot make a call to book cylinder from someone else’s registered mobile number. So diversions will also be less.