The government plans to provide subsidy to 14 crore LPG subscribers directly in their bank accounts from October 1, using the Aadhaar payment platform.
The government, official sources said, has decided to launch "Direct Benefit Transfer (DBT) for LPG throughout the country tentatively from October 1".
"This (transfer of LPG subsidy) would require a much larger number of beneficiaries to be covered for opening of bank accounts and linked to Aadhaar and banks have been asked to get ready for the launch," said one official.
A consumer will have to get his or her bank account seeded with Aadhaar number for getting the LPG subsidy. The annual subsidy per consumer is estimated at Rs 4,000. The supply of subsidised LPG cylinder has been capped at 9 cylinders per year for a consumer.
While about 32 crore Aadhaar cards have been issued by UIDAI, only 80 lakh bank accounts have linked to the unique identity numbers so far.
Under a pilot project for LPG subsidy transfer, 20 districts in the country will be covered by May 15.
While the exact procedure to transfer the subsidy is being worked out, sources said subscribers will have to buy the LPG bottle at prevailing market price (currently Rs 901.50 per 14.2-kg cylinder in Delhi) and subsequently the subsidy amount will be transfered to the bank account.
The Finance Ministry has asked the public sector banks to speed up the process of linking accounts with Aadhaar.
The government expects that the DBT will eliminate all ghost LPG connections and diversion of cylinders.
Under the DBT scheme, subsidies and other benefits are transferred directly into the Aadhaar linked bank account of the beneficiary.
Meanwhile, Finance Minister P Chidambaram, Planning Commission deputy chairman Montek Singh Ahluwalia, Petroleum Minister Veerappa Moily and Rural Development Minister Jairam Ramesh would review the DBT scheme with state officials on Monday.