The government on Wednesday defended its calculations in response to a report by The Hindu highlighting the concerns raised by the Comptroller and Auditor General of India (CAG) regarding the authenticity of its claims on dramatic savings in LPG subsidy.
“In this regard, it is clarified that an intensive exercise was carried out for identifying duplicate/fake/ghost/inactive domestic LPG connections and, as of April 1, 2015, 3.34 crore such connections were identified by the oil marketing companies [OMCs],” the government said in a clarification sent to The Hindu .
“As a result of implementation of DBTL (PAHAL) mechanism, it became possible to block these 3.34 crore LPG connections as the subsidy was transferred in the accounts of only those consumers who had registered under PAHAL and who have been cleared after de-duplication exercise,” it added.
The CAG audit has found that the saving from people voluntarily giving up LPG subsidy — under the government’s Give It Up campaign — and direct bank transfers under the PAHAL scheme adds up to less than Rs. 2,000 crore, a far cry from the Rs. 22,000 crore-odd touted by the government.
The remaining saving, according to the auditor, is due to the dramatic fall in the prices of LPG that India annually imports.
“For the financial year 2014-15, for 3.34 crore consumers outside the PAHAL net, the estimated savings would be 3.34 crore x 12 cylinders x Rs.369.72 (average subsidy/cylinder for FY 2014-15) equal to Rs. 14,818.4 crore. Following a similar principle, the savings estimated for FY 2015-16 is Rs. 6,443 crore and the total for both the years, works out to Rs. 21,261 crore,” the government clarification said.
The clarification also seeks to show that the proof of the elimination of the bogus connections lies in the growth of non-subsidised connections in 2015-16.
“It should be noted that concrete evidence of successful elimination of bogus connections is seen in the phenomenal growth of non-subsidised commercial LPG sales which have registered an increase of 39.3 per cent in the period April 2015 to March 2016. This is in contrast to the pre-PAHAL experience when commercial sales growth was negligible or declining,” it said.
It is unclear whether this assertion takes into account the number of non-subsidised LPG connections that would have been added due to people legitimately giving up their subsidy. At last count, over 1 crore people had given up their LPG subsidies under the Give It Up campaign.
