The Union Government has advised the States, including Odisha, to reduce kerosene quota to get more financial incentives.
Alluring the States for providing more financial incentives, the Ministry of Petroleum and Natural Gas has offered a proposal that as much as the States would reduce the kerosene quota they would be given more incentives.
Notably, the Centre has reduced the States’ kerosene allocation by 4,000 Kl to 74,608 Kl a month from this April. In a bid to bring reforms in the system of providing subsidy for kerosene, the Centre has decided to provide financial incentives to the States to encourage them to cut the quota.
The States reducing 25 per cent to 50 per cent from the total allocation would be provided the financial incentives accordingly. On reduction of 1 litre kerosene, a State would get incentive of Rs 11.
Odisha was allocated 3,89,724 litre of kerosene in the 2015-16 fiscal. If the State cuts 25 per cent in the current fiscal, the Centre would provide Rs 72.34 crore as fiscal Incentive. On reduction of 50 per cent, the amount may be increased to Rs 144.68 crore, sources said.
A total of 86,85,384-litre kerosene was distributed across the country during 2015-16. If all the States cut a 25-per cent allocation, they would be given Rs 1611.66 crore, and on reduction of 50 per cent, the Centre would provide them Rs 3,223.33-crore incentives.
The States have been asked to cut the kerosene quota in phases. They have been suggested to prepare a plan for its implementation. In this regard, the Ministry has offered a proposal to the Food Supplies and Consumer Welfare Departments of the States to prepare a blueprint for execution of the scheme.
The Direct Benefit Transfer (DBT) system under kerosene allocation is being executed in only 40 districts of the country on a pilot basis. As it would take a longer time to execute the system in the entire country, the Centre has come up with such a proposal to increase use of lPG against kerosene.
Moreover, the reduction of kerosene quota would decrease the environment pollution, and through this proposal, the financial incentives can be utilised for both rural and urban electrification schemes, sources said.