LPG subsidy cap raised, DBTL scheme supended

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SME Times News Bureau | 31 Jan, 2014
The Cabinet Committee on Political Affairs (CCPA) Thursday decided to raise the annual cap on supply of subsidised LPG cylinders to 12 from the existing nine, and also put on hold LPG subsidy payment into bank accounts linked to Aadhaar cards.

Announcing the decision, Petroleum and Natural Gas Minister M. Veerappa Moily told media persons here that "in addition to the nine subsidised cylinders given to consumers in a year, there will be one cylinder given in February and one more in March".

"From the first of April 2014, 12 cylinders will be given per year, that is, one cylinder per month."

The decision comes after Congress vice president Rahul Gandhi urged Prime Minister Manmohan Singh, at the AICC session here earlier in the month, to raise the cap on supply of subsidised LPG cylinders to 12.

The CCPA headed by the prime minister also decided to suspend the direct benefit transfer for LPG (DBTL) scheme until a committee submits a review of its implementation.

"Pending the committee examining the issues, the Aadhaar-linked LPG subsidy transfer has been put on hold," Moily said.

Saying that a committee has been formed to review the scheme, he added that "the committee will go into the complaints. There are a lot of complaints about problems in accessing Aadhaar."

Pointing out that 99.2 percent of cooking gas consumers will be covered by the increase in availability of subsidised cylinders, Moily said the annual subsidy burden on this account would totally come to Rs.80,000 crore.

"Total sale of cylinders with subsidy would come to 95.29 crore cylinders and the total annual subsidy burden at the rate of Rs.800 per cylinder will come to Rs.80,000 crore," the petroleum minister said.

Moily said the additional fuel subsidy arising out of Thursday's hike in number of cylinders would be around Rs.5,000 crore.

Under the Aadhaar card-linked DBTL scheme consumers in 289 districts in 18 states received the subsidy amount of Rs.435 in their bank accounts to buy cooking gas at market rates. The scheme was, this month, extended to 105 districts including Delhi and Mumbai.

Many consumers either do not have the Aadhaar number, or possess banks accounts linked to their Aadhaar number.

Subsidised LPG costs Rs.414 for the 14.2-kg cylinder in Delhi, while consumers who have exhausted their quota have to buy LPG at the market price of Rs.1,258 per cylinder.

Reacting to the centre's decision to raise the cooking gas quota, Samajvadi Party chief Mulayam Singh Yadav said the limit should be raised to 24 and the poor should get it free.

"That is not a big deal," Yadav said here at a party event, reacting to the union cabinet decision.

"The number should be 24 and not twelve, and the poor should get it free," he added.

After Rahul Gandhi's assertion at AICC session on Jan 17 that the cap should be hiked, the government today raised the quota of subsidised LPG to 12 cylinders per household in a year from nine at present and also put on hold paying users the subsidy into bank accounts using Aadhaar platform.