LPG subsidy to be credited directly in bank accounts from June 1 in 18 districts

Updated - June 08, 2016 01:21 am IST

Published - May 29, 2013 06:11 pm IST - New Delhi

Kochi.,Kerala: A load of LPG cylinder seen  near NH bypass  Kochi Photo:Vipin Chandran

Kochi.,Kerala: A load of LPG cylinder seen near NH bypass Kochi Photo:Vipin Chandran

Starting June 1, cooking gas (LPG) consumers in 18 districts will get Rs. 435 in their bank accounts when they book an LPG cylinder as the government rolls out its ambitious direct benefit transfer programme to cut its fuel subsidy.

The scheme was to be rolled out in 20 districts initially but the launch in Mysore in Karnataka and Mandi in Himachal Pradesh has been put off by a month due to assembly and Parliamentary bypolls, official sources said.

Oil Minister M Veerappa Moily will launch the scheme in Tumkur, in his home State Karnataka, on June 1, while Minister of State for Petroleum and Natural Gas Lakshmi Panabaka will simultaneously kickoff the scheme in Hyderabad, the capital of her home State Andhra Pradesh.

Sources said that after the launch of the scheme, consumers in 18 districts like North Goa and Pondicherry will get Rs. 435 in their bank accounts every time they book for 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.

The government intends to extend the scheme to the rest of the country before the year-end, but wants to see results in the 20 districts first. The 20 districts selected have high Aadhaar or unique identification number penetration.

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, they said.

The government anticipates a saving of Rs. 8,000 to Rs. 10,000 crore in LPG subsidy annually after the scheme is rolled out all over the country.

The Government had, in January, launched what is being dubbed as a game-changer DBT, wherein government benefits like pensions and scholarships are directly transferred to beneficiaries.

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.

The 18 districts where the DBT for LPG is being launched from June 1 include Anantpur, Chittoor, East Godavari, Hyderabad and Ranga Reddy in Andhra Pradesh; Diu in Daman and Diu; North Goa; Bilaspur, Hamirpur and Una in Himachal Pradesh; Tumkur in Karnataka; Pathanamthitta and Wayand in Kerala; Wardha in Maharasthra; Pondicherry; SBS Nagar/Nawanshahar in Punjab and East Nimar (Khandwa) and Harda in Madhya Pradesh.

The scheme would be rolled out in Mandi and Mysore from July 1, they said.

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