LPG subsidy: AP minister comes out with formula

Incremental revenue generation from diesel, LPG should be diverted as subsidy to reduce burden on common man: Ramachandraiah

September 16, 2012 09:52 am | Updated 10:12 am IST - HYDERABAD

C. Ramachandraiah. Photo: By Arrangement

C. Ramachandraiah. Photo: By Arrangement

Endowment Minister C. Ramachandraiah has been quick in coming out with calculations to show how the State government can easily supply LPG cylinders at subsidised price to common man beyond the cap of six cylinders imposed by the Centre.

His formula is simple which he explained in a letter to the Chief Minister N. Kiran Kumar Reddy here on Saturday.

After the price of diesel was increased by Rs.5 a litre, the government will earn an additional Rs.1.50 a litre, thanks to 22 per cent VAT on the increased price. With 5,140 lakh litres of diesel sold a month in the State, the additional revenue to the State would be Rs.900 crore, he said.

The incremental revenue generation from diesel and LPG should be diverted in the form of subsidy to reduce the burden on the common man for consumption of additional LPG cylinders over and above the six cylinders for domestic purpose.

Mr. Ramachandraiah said that on an average, a family of four members would require nine LPG cylinders per year. With the Centre giving only six cylinders on subsidised rate of Rs.400 each, the State could bear the subsidy burden for the remaining three cylinders which would cost Rs.750 each. The government would require Rs.1,050 crore to support the common people in the use of cylinders required for them in a year at the old rate.

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