Finance

Fix Ujjwala: CAG audit points out problems, Aadhaar and third-party apps can fix

The CAG audit findings make a strong case for not just Aadhaar linking of all family members of existing as well as new beneficiaries to ensure rigorous de-duplication but also for spot checks to see if intended beneficiaries are diverting LPG to unintended beneficiaries or for commercial purposes.

The audit of the Pradhan Mantri Ujjwala Yojana (PMUY) by the Comptroller and Auditor General of India highlights problems that the government will do well to pay heed to and address. The goal was to give eight crore women LPG connections under the PMUY and Extended PMUY (E-PMUY). While 7.2 crore families have got the LPG connections, the progress of Aadhaar linking—to ensure there are no leakages—has been patchy. Around 3.8 crore PMUY households were covered and the remaining 3.4 crore were E-PMUY. Though the CAG doesn’t give details for E-PMUY households, in the case of 3.8 crore PMUY households, it says just 42% were Aadhaar linked.

Sustained LPG use, one of the key goals of the PMUY, also seems to be out of grasp at present with the annual average of refill consumption for nearly two crore PMUY consumers (who had completed more than one year of connection by March 31, 2018) was just 3.66 refills while, for 3.2 crore beneficiaries, it had declined to 3.21 refills as on December 31, 2018.

Diversion of domestic cylinders for commercial use that plagued the earlier LPG subsidy regime in the country was noticed for nearly two lakh PMUY beneficiaries who had an annual consumption of more than 12 cylinders per year, which is unlikely to have been a genuine demand given their BPL status. Nearly 14 lakh beneficiaries consumed between three to 41 refills a month while IOC and Hindustan Petroleum reported that in 3.44 lakh cases, two to twenty refills had been issued in a day to individual PMUY beneficiaries having single bottle cylinder connection. While these numbers are a small fraction of the numbers genuinely benefited by PMUY, they are still a cause for worry as diversion could grow if it is not nipped immediately.

The CAG audit also pointed out instances of bank account of others being linked to Ujjwala scheme beneficiaries, which means the subsidy transferred may be getting waylaid—“during test check of KYC records at sample 164 LPG merchants, 100 instances were seen where bank account of others were linked with PMUY beneficiaries”, the report noted.

The audit findings make a strong case for not just Aadhaar linking of all family members of existing as well as new beneficiaries to ensure rigorous de-duplication but also for spot checks to see if intended beneficiaries are diverting LPG to unintended beneficiaries or for commercial purposes. Apart from rejigging the software at oil-marketing companies to add the appropriate input controls and data validation, e-KYC needs to be initiated too. A special focus also needs to be given to low consumption households, especially to address the underlying factors. The scheme had called for third-party audits to ensure that leakages are eliminated; the government must try and formalise this at the earliest. The Ujjwala scheme has the potential to be transformative, but only if effective monitoring prevents it from being hijacked to the bad old days of rampant leakage.

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