Delhi govt may roll-out cash payouts for kerosene subsidy

New Delhi: Delhi may soon become the first city in the country to dole out cash payouts instead of subsidised kerosene to the BPL families, a move aimed at controlling widespread pilferage of the fuel.

As per the proposal put forth by Chief Minister Sheila Dikshit, cash equivalent of the monthly kerosene subsidy will be directly transferred to the bank account of the female head of the family.

A BPL family is likely to get around Rs 400 as monthly cash payouts instead of subsidised kerosene if the proposal originally mooted by the Planning Commission goes through.

The city government is currently holding discussions with the Ministry of Oil and Natural Gas and a final decision on the issue is expected next month.

Every BPL family in the city is entitled to get 22 litres of kerosene per month at Rs 9 per litre against the market rate of Rs 27 to Rs 30 per litre.

The subsidy component of kerosene comes to around Rs 18 per litre.

"Discussions are on with the Oil and Natural Gas Ministry and we are expecting a final decision on the issue soon," a top official of Delhi government said.

He said under the scheme, bank accounts of all four lakh BPL families will be opened and cash component of the kerosene will be transferred to the beneficiaries on monthly basis.

As per the proposal, the government will open bank accounts in the name of the female head of the family as budget of the kitchen is mostly taken care of by her.

Food and Civil Supplies Minister Harun Yusuf said despite their persistent efforts, the department has not been able to stop diversion of kerosene meant for distribution under the PDS system.

"There are loopholes in the PDS system. The kerosene meant for the BPL families at times does not reach the beneficiaries. That is why we are trying to evolve a mechanism under which poor families get their dues," he said.

According to a study by the National Council of Applied Economic Research, nearly half of the kerosene supplied through PDS in Delhi found its way to black market.

State-run oil companies are losing around Rs 28 a litre of kerosene for selling it below the imported cost.

As part of its efforts to streamline the PDS system, the city government had last year started the process of issuing bio-metric BPL cards.

The government had also found at least 18,000 bogus ration cards in the national capital last year.

While presenting the Union Budget, Finance Minister Pranab Mukherjee earlier this year had said the government would move towards direct transfer of cash subsidy in a phased manner.

A task force headed by UIDAI chairman Nandan Nilekani is working out the modalities for the proposed system of direct transfer of subsidy for kerosene, LPG and fertilisers.