Unclear subsidies under PMUY balloon, tech glitches block payments

Thousands beneficiaries have not received subsidies for their liquefied petroleum gas (LPG) cylinders over the past few months, said a petroleum industry official. 

Problems with their Aadhaar cards linked to their bank accounts have blocked the clearance of payments.
At the same time, the rising international fuel prices had added to the government subsidy burden.
The officials said in August, at least 250,000 PMUY beneficiaries had not got subsidies while other beneficiaries of the LPG subsidies are noticing glitches too. The data from the National Payments Corporation of India (NPCI) showed that about 500,000 subsidy transactions have failed each month since April this year. In August, 567,000 transactions failed — a rise of 27 per cent over 443,000 failed transactions in April.
In absolute value terms, LPG subsidy transactions worth Rs164.8 million were declined by banks in August, an increase of 87 per cent over Rs88.1 million in April.

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The official quoted above said the rise in international fuel prices has increased the amount stuck. This is a major problem of PMUY beneficiaries, he added. The cash compensation for LPG is currently Rs320.49 per cylinder, double of Rs159.29 in May this year. 

The overall LPG subsidy burden on the government is expected to increase to Rs352.57 billion, against the budgeted Rs203.77 billion for financial year 2018-19 (FY19). The subsidy during the financial year 2017-18 was Rs208.8 billion. In FY19, it touched Rs50.26 billion by June. “We are already in talks with the NPCI to sort out the issue,” the official added.

This will be a big blow for the PMUY, the flagship programme of the Narendra Modi government through which subsidies are given to Below Poverty Line families to get free gas connections. Under the PMUY, the government has so far allotted 55.2 million connections in 715 districts. Subsidies are stuck for both PMUY and DBT beneficiaries who stand to receive subsidy on their LPG cylinders. 

The NPCI runs the Aadhaar Mapper, a platform for banks to update biometric identification numbers of the beneficiaries for subsidies. These accounts are credited with subsidy when the ministry clears payments. But sometimes, the subsidy does not make it to the consumers’ account because of issues in linking Aadhaar numbers and bank accounts. 

Closed accounts, accounts frozen because of non-compliance of Know-Your-Customer norms, problems in demographic authentication with Aadhaar, and bank database problems are some of the reasons for failed subsidy transactions, said NPCI in an email response to questions sent on it on this issue.

The NPCI said while most of the 140 million transactions on Aadhaar Payments Bridge were processed successfully each month :a very minor; portion might fail. 

According to the official data, only about 0.54 per cent transactions for subsidies failed in April, rising to 0.58 per cent by August. However, in absolute numbers, the volume of failed transactions increased by 123,000 in the past five months. 

Once a transaction fails, it is the responsibility of the ministry to direct customers to provide a copy of their documents, so that it can be done manually. 

The NPCI claimed if Aadhaar-based transactions are returned by banks on technical grounds, the subsidy can be credited using the account number of the customer as well. 

The NPCI data shows that more than 665,000 transactions amounting to more than Rs160 million for account-based transfers of LPG subsidies were returned between April and August. 

The three oil marketing companies: Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation put together have 234.7 million active LPG customers in the domestic category. We are working with banks to further minimise the failure rate, the NPCI said.


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