blur image on touch in android

I want to develop an android application like this with some extra features: http://ift.tt/1HCyJse

I am using the following code so far:

class TouchView extends View {
    Bitmap bgr;
    Bitmap overlayDefault;
    Bitmap overlay;
    Paint pTouch;
    int X = -100;
    int Y = -100;
    Canvas c2;
    private final Path clipPath = new Path();
    @SuppressLint("NewApi")
    public TouchView(Context context) {
        super(context);

         if (Build.VERSION.SDK_INT >= 11) {
               setLayerType(View.LAYER_TYPE_SOFTWARE, null);
        }

        String file = getIntent().getStringExtra("file");

        bitmap = BitmapFactory.decodeFile(file).copy(Config.ARGB_8888, true);


        Bitmap newbitmap = Bitmap
                .createScaledBitmap(bitmap, 512, 512, true);
        Bitmap newtemp = BitmapFactory.decodeFile(file).copy(Config.ARGB_8888, true);
        Bitmap temp = Bitmap.createScaledBitmap(newtemp, 512, 512, true);



        Bitmap blurredBitmap = fastblur(temp, 10);

        bgr = blurredBitmap.copy(Config.ARGB_8888, true);

        overlay = newbitmap.copy(Config.ARGB_8888, true);


        c2 = new Canvas(overlay);

        pTouch = new Paint(Paint.ANTI_ALIAS_FLAG);
        pTouch.setXfermode(new PorterDuffXfermode(Mode.SRC_OUT));
        pTouch.setColor(Color.TRANSPARENT);
    }

    @Override
    public boolean onTouchEvent(MotionEvent ev) {
        switch (ev.getAction()) {
        case MotionEvent.ACTION_DOWN: {
            X = (int) ev.getX();
            Y = (int) ev.getY();
            invalidate();
            break;
        }
        case MotionEvent.ACTION_MOVE: {
            X = (int) ev.getX();
            Y = (int) ev.getY();
            invalidate();
            break;
        }
        case MotionEvent.ACTION_UP:
            break;
        }
        return true;
    }

    @Override
    public void onDraw(final Canvas canvas) {
        super.onDraw(canvas);

        // draw background
        canvas.drawBitmap(bgr, 0, 0, null);

        c2.drawCircle(X, Y, 50, pTouch);
        // draw the overlay over the background
        canvas.drawBitmap(overlay, 0, 0, null);
    }
}

I am selecting the image from gallery and getting its path from previous activity in "file" string.

Using the above code, if I select a transparent background .png image, it works fine. But when I select some camera images of .jpg format it is not working and show me the black portion on touch areas instead of blur background image. I also tried to convert an image into png but didnt get any success.

I also set hardware acceleration to false in manifest but in vain.

Please help me. Thanks