Government would include the lPG subsidy component under its ambitious direct benefit transfer (DBT) scheme, which would be rolled out in 20 districts from June 1 onwards, Petroleum Minister M Veerappa Moily announced on Wednesday.
The decision is expected to cut down the Government's subsidy outgo by up to Rs 10,000 crore annually as this would prevent diversion of connections at the grass root level, the minister said while addressing a press conference.
The Government had launched the DBT in 121 districts of the country in January this year, which is being dubbed as game-changer for the UPA in the forthcoming lok Sabha polls. However it did not have the lPG subsidy component at that time.
Moily said 76 lakh consumers in 20 districts like Mysore, North Goa, Pondicherry, Mandi and Hyderabad, will get Rs 435 in their back accounts every time they book an lPG refill.
These consumers then will have to buy cooking gas at market price which is double the Rs 410.50 rate for a 14.2-kg bottle in Delhi.
Announcing the launch, Moily said the Government intends to extend the scheme to rest of the country but refused to give timelines for the same.
“We are ready to launch the direct benefit transfer (DBT) scheme for lPG all over the country but we want to see the results of the roll-out in these 20 districts,” he said.
The 20 districts which have been selected have high Aadhaar or unique identification number penetration. These are situated in states like Andhra Pradesh, Karnataka, Kerala, Goa, Maharashtra, Himachal Pradesh, Punjab and Madhya Pradesh.
While as many as 89 per cent of the lPG consuming population in these districts have Aadhaar number, the Government will give a three-month grace period to them to procure the UID number and seed it with their bank accounts where cash subsidy has to be transferred.
After three months, that is from September 1, only consumers having Aadhaar and banks accounts linked to them will get cash subsidy and the rest will have to buy lPG at market price, he said.
The Government anticipates a saving of Rs 8,000 to 10,000 crore in lPG subsidy annually after the scheme is rolled out all over the country.
The massive KYC exercise to weed out duplicate and fictitious consumers has resulted in blocking of 63 lakh connections that alone will save about Rs 2,000 crore in subsidy.
The nation has some 14 crore lPG consumers of which 2.5 crore were suspected to be duplicate or consumers holding more than one connection at the same address.
“Of these 63 lakh connections have been blocked as there was no response from the owners in past one year to requests for completing the Know-Your Customer (KYC) formalities,” said Neeraj Mittal, Joint Secretary (Marketing) in the Petroleum Ministry.
The scheme is now being extended to lPG with the aim that the Government subsidy reaches the intended beneficiary only.
Currently, consumers are entitled to nine 14.2-kg cylinders of lPG at subsidised rates in a year from lPG dealers. Many of these are black-marketed to unintended users like commercial establishments who otherwise have to buy the fuel at market price.