Now, get subsidy for kerosene in bank account from April 1

Zee Media Bureau

New Delhi: Government will directly transfer the subsidy for kerosene to bank accounts from April 1.

According to The Economic Times report, something like the Direct Benefit Transfer scheme for LPG, government will from April 1 roll out a similar programme for kerosene where the users will buy the cooking fuel at market rate but will get financial support directly in their bank accounts.

The cash subsidy to be paid to users will be equivalent to the difference between current PDS price of about Rs 12 and market rate of Rs 43 per litre. 

The move will help curtail subsidy outgo for kerosene, which in 2014-15 was about Rs 24,799 crore.

Several state governments have come forward to implement direct benefit transfer (DBT) in kerosene in selected districts,the report said quoting a government official.

The scheme will be rolled out from April 1 in Raipur, Durg and Bilaspur in Chhattisgarh, Panipat and Panchkula in Haryana, Shimla, Solan and Una in Himachal Pradesh, Chhatra, Giridih, East Singbhum, Hazaribagh, Jamtara and Khunti in Jharkhand. 

Besides, the scheme will be implemented in Hoshangabad, Harda, Khandwa and Burhanpur in Madhya Pradesh, Amaravati and Latur in Maharashtra, Taran Taran, Pathankot and Mohali in Punjab and Pali, Jhunjhunu and Kota in Rajasthan.

The report added that where such transfer is introduced, the consumer will pay the un-subsidised price of kerosene at the time of purchase. Subsequently, the amount of subsidy will be directly transferred to the bank account of the beneficiary.

The subsidy will be credited to eligible beneficiaries in advance during the initial purchase. The report said that with a view to incentivize States/UTs to implement DBT in kerosene, it has been decided that the states be given cash incentive of 75 per cent of subsidy savings during the first two years, 50 per cent in the third year and 25 per cent in the fourth year.

Stating that the scheme will be implemented with effect from April 1, 2016, it said the state governments will be consulted in the meantime before operationalising the scheme. The working of the scheme will also be reviewed after three months of implementation.

The National Sample Survey 2011-12 indicates that the total consumption of kerosene in the country, including both open market and PDS kerosene, was 71.30 lakh kilolitres.

Even though consumption of kerosene has been coming down over the years, 86.85 lakh kilolitres of subsidized PDS kerosene has been allocated to the states in the year 2015-16, which is higher than the total household kerosene demand in the country.