Jharkhand becomes first state to launch Direct Benefit Transfer in Kerosene

Jharkhand becomes first state to launch Direct Benefit Transfer in Kerosene

Jharkhand has become the first state in the country to implement Direct Benefit Transfer (DBT) in Kerosene in four identified districts namely, Chatra, Hazaribagh, Khunti and Jantara from 1st October, 2016.

Under the DBTK Scheme, PDS kerosene is being sold at non-subsidised price, and, subsidy, as admissible, is being transferred to consumers directly into their bank accounts. This initiative of the governments is aimed at rationalising subsidy, based on the approach to cut subsidy leakages but not subsidy per se.

All You Need To Know About DBTK:

The Government has announced implementation of Direct Benefit Transfer (DBT) in Kerosene w.e.f. April, 1, 2016 in 33 districts identified by 9 State Governments namely, Chhattisgarh, Haryana, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Punjab, Rajasthan and Gujarat.

Under the scheme for direct transfer of subsidy, the consumer will pay the non-subsidized price of kerosene at the time of purchase. Subsequently, the amount of subsidy will be directly transferred to the bank account of the beneficiary.

To avoid any inconvenience to the beneficiary during the initial purchase through payment of non-subsidized price, an initial amount of subsidy shall be credited to all eligible beneficiaries. As a part of this scheme, implementing

States will be given fiscal incentives equivalent to 75 % of subsidy saved in the first two years, 50 % of subsidy saved in third year and 25 % of subsidy saved in 4th year.

Challenges and issues associated with the implementation of the scheme: 

Various states have conveyed that issues having a bearing on implementation of the scheme included the basis of identifying beneficiaries, use of Point of Sale (PoS) machines, integration with the existing PDS system and modalities of availability of white kerosene, etc. were discussed.

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Apart from the nine States, other States also evinced keen interest in joining the DBTK platform.

The government has decided to carry forward the process and discuss the modalities of implementation with the nominated nodal officers. All other stakeholders including NIC, Banks, etc will also be part of the consultative process.

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