New Delhi: The government is working out modalities for the roll out of direct transfer of cash subsidy to cooking gas (LPG) consumers, Petroleum Minister M Veerappa Moily said Tuesday.
"We discussed moving LPG under Direct Benefit Transfer (DBT) scheme. We believe LPG subsidy can be given out under DBT. The Finance Ministry is working out modalities of LPG subsidy roll out under DBT," Moily said after a meeting with Finance Minister P Chidambaram.
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.
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 the 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.
Chidambaram had last week said he would meet his petroleum counterpart to work out modalities for direct fund transfer to LPG customers.