The much awaited Empowered Group of Ministers (EGoM) meeting to take a decision on curtailing subsidy for domestic LPG cylinders was deferred on Friday following "serious differences" within the UPA constituents over cutting down the subsidy burden.
The meeting of the EGoM, headed by Finance Minister, Pranab Mukherjee, which was scheduled to meet at noon, was called off at the last moment due to differences among the UPA Ministers who were part of the EGoM. Although, there was no official word on why the meeting was postponed, insiders in the Government said some of the Ministers of the UPA allies were opposed to curtailing of the LPG subsidy, especially in view of the sharp increase in prices of petrol during the last one year.
The EGoM has already held a preliminary meeting on the issue and was scheduled to take a final decision on bringing down the number of subsidised LPG cylinders to 4-6 per household in a year to cut down the government's subsidy outgo by over Rs. 12,000 crore.
However, insiders said that leading the opposing brigade was the DMK leader and Fertiliser and Chemicals Minister, M.K. Azhagiri who decided not to attend the meeting to show his party's opposition to the proposal. The Trinamool Congress, which was also opposed to the move, had decided to protest the decision on LPG through its representative in the EGoM, Railway Minister, Dinesh Trivedi.
Other members of the EGoM include NCP leader and Agriculture Minister, Sharad Pawar, Power Minister, Sushilkumar Shinde, Road and Surface Transport Minister, C.P. Joshi, Petroleum Minister, S. Jaipal Reddy and Planning Commission Deputy Chairman, Montek Singh Ahluwalia.
Both the Petroleum and Finance Ministries have been very keen on the proposal, as it would have plugged the diversion of subsidised LPG for commercial use and cut down the government's subsidy outgo. The EGoM was to consider giving every household only 4-6 LPG cylinders at a subsidised price of Rs. 395.35 in Delhi and asking them to pay the market price of Rs. 666 per cylinder for any requirement beyond that.
Limiting the supply of subsidised LPG cylinders was likely to save the government over Rs. 12,000 crore in subsidy outgo annually. The limited supply of subsidised LPG would be for those who own a car, two-wheeler, house or figure in the income tax list, according to the proposal. Each 14.2-kg bottle of LPG normally lasts a household 45-60 days and based on this calculation, six cylinders are enough to see a family through the year. At present, the records of LPG distributors of public sector companies shows that a vast number of households are taking as many as 20 to 30 cylinders per household each year.
Oil marketing companies (OMCs) said this clearly suggested that large-scale diversion of subsidised cooking gas is taking place, for use in commercial establishments, such as restaurants and dhabas and as auto fuel.
PTI adds:
RBI hikes repo rates
Interest rates and EMIs are set to go up again with the Reserve Bank on Friday hiking its key rates by 25 basis points, the 12th time since March last year, to tame high inflation overlooking sliding growth.
The short-term lending (or repo) rate to banks stands revised to 8.25 per cent, while the borrowing (reverse repo) rate is set at 7.25 per cent
