Cabinet okays massive rollout of LPG direct benefit scheme

HYDERABAD.01/06/2013. The ‘Aadhaar based Direct Benefit Transfer for LPG subsidy to consumers scheme’ will benefit close to 50 lakh customers after it was launched in five district in the state of Andhra Pradesh, in Hyderabad on Saturday. ..Photo: Mohammed_Yousuf

Following the success of the direct benefit transfer (DBT) cash subsidy payment scheme in 20 districts of the country, the Government has decided to go for a massive roll out of the scheme in 269 more districts of the country from January 1, 2014 in a phased manner to cover LPG consumers.

“Based upon the experience gained in 20 districts, we have decided to rapidly roll out the DBT for the LPG over 269 more districts in a phased manner. By January 1, a huge proportion of LPG beneficiaries will be covered under the DBT system. They will get their subsidy credited one month in advance. Therefore, they can go and get their LPG cylinder for a month following that. It is already successful in 20 districts,’’ Finance Minister P. Chidambaram said, after the approval by the Cabinet Committee on Economic Affairs for the extension of the scheme.

Under the scheme, Rs. 435 is credited to the accounts of LPG consumers the moment they book a cooking gas refill or cylinder. The consumer is then supposed to use this to buy a 14.2 kg LPG cylinder at market price, which is almost two times the subsidy. The moment the refill is bought, another Rs. 435 is credited to Aadhaar-linked bank account of LPG consumer. The scheme is aimed at checking subsidised LPG cylinders meant for household use finding way to the black market or being used in commercial establishments.

The government estimates it could end up saving Rs. 9,000 crore annually when the scheme is rolled out all over the country. Under the scheme, consumers will get cash subsidy to buy 9 cylinder refills in a year. Any requirement beyond that would have to be purchased at market price.

Mr. Chidamabaram said the scheme will be rolled out on the first day of each month between September and January. In the first phase, starting with September 1, it would be rolled out in 34 districts, benefiting 1,47,54,303 consumers. On October 1, it would be rolled out in 44 districts; 46 districts in November; 40 districts in December and 105 districts in January, 2014.

“This is an ambitious programme. These lists have already been sent to banks concerned. All the banks have been asked to focus on the districts where the scheme is going to be rolled out in September 1 and October 1,” he remarked.

Mr. Chidambaram said oil marketing companies have also been asked to chip in for opening bank account of the consumers. He said subsidy will be transferred to consumers who have bank accounts seeded with Aadhaar number, but a three-month grace period will be given to consumers to procure the Aadhaar number and opening up of the bank account.

“The scheme has been remarkable success. We think that there will be a saving between 10-12 per cent on subsidy outgo towards the LPG cylinder. Those who have got double connection or false connection are not coming to open bank account and are not coming forward to get their Aadhaar number,” he added.