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Government plans to give LPG subsidy in cash to beneficiaries

Last Updated: Saturday, April 6, 2013 - 23:48

New Delhi: Finance Minister P Chidambaram on Saturday said he will meet Oil Minister M Veerappa Moily shortly to finalise schedule for rolling out direct transfer of cash subsidy to cooking gas (LPG) consumers.

"(In) the next few days, Moily and I would meet and we will discuss and decide on the date when we can move the transfer of LPG subsidy through the Direct Benefit Transfer (DBT)," Chidambram told reporters here. "We want to do it as early as possible."

Once implemented, the government will transfer close to Rs 4,000 to every household annually to enable people to buy 9 cylinders of LPG at market price.

Currently, state-owned oil firms sell domestic cooking gas at a highly subsidised rate of Rs 410.50 per 14.2-kg cylinder. It is half the market price and the difference is made good by the government in the form of subsidy to oil companies.

When DBT is implemented, the government will transfer this Rs 435 per cylinder subsidy to consumers directly instead of giving it to oil companies. Consumers are entitled to get 9 cylinder of 14.2-kg each at the subsidised rate in a year. So each consumer will get a little less than Rs 4,000 annually but will have buy LPG at market price.

The government was to implement the DBT for LPG in a phased matter beginning with one district and extending to 20 by May 15. It will be extended all over the country as and when beneficiaries get the unique identification number Aadhar and have their bank accounts linked to that.

"We want to quickly move the LPG subsidy into the DBT scheme. It will bring about a great deal of efficiency, it will eliminate all duplicate connections and once it eliminates duplicate connection, it will also save us some subsidy," Chidambaram said.

"So that a decision will be taken in the next few days when Moily and I will be able to meet," he said, adding that the Oil Ministry has been asked to provide a district-wise digitised beneficiary list, which will be handed over to the lead bank of that area to verify accounts where the subsidy can be transfered.

The Minister said the number of registered LPG users in the country was over 14 crore and it was quite possible that a significant number were either duplicate or a double entry.

"In DBT, initially, there will be problems, but we will achieve our goals provided we address those problems. We have rolled out in 43 districts, we have now decided to roll it out in 78 more districts. That will make it 121 districts, which is roughly 20 percent of the whole country," he said.

"There will be further roll-outs and I am confident that by the end of 2013-14 the rollout will be complete or nearly complete," he said.

He said for a scheme of such large magnitude there will be some problems "but we are getting over the problems."

"We were better in February, than we were in January (when DBT was first launched for select schemes like pensions and scholarships). We were better in March than we were in February and I am absolutely confident as we move along every month the system will get better," he said.

The Ministry said initially DBT for some 26 schemes that would be extended to the remaining 78 districts.

"Yes there will be some problem as we roll out in the 78 districts. But I don't think, we should be deterred by that. We should deal with the problems as we find them. We should press on... This is indeed a revolutionary change in the manner in which benefits are transferred to the beneficiaries," he said.


First Published: Saturday, April 6, 2013 - 18:51
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