Rs 40,000 crore LPG subsidy put into bank accounts of consumers in 2 years: Dharmendra Pradhan

Rs 40,000 crore LPG subsidy put into bank accounts of consumers in 2 years: Dharmendra Pradhan

The Narendra Modi government has transferred Rs 40,000 crore, or $6.5 billion, into bank accounts of household LPG consumers in the two years since it refreshed the cooking gas subsidy regime to plug leakages, according to oil minister Dharmendra Pradhan.

The weeding out of some 3.3 crore (33 million) ghost accounts as part of the reform process resulted in savings of Rs 21,000 crore, or $3.2 billion, in subsidy payout, which has helped the government to spend more on social sector projects and bring clean fuel to poor households.

As a pointer to the success of the reforms in the direct benefit transfer scheme for LPG – DBTL, which is now known as PaHAL, Pradhan told the Asia LPG Summit curtain-raiser on Monday that sale of commercial LPG cylinders jumped nearly 40% in 2015-16 against a stagnant demand earlier.

Commercial cylinders are sold at market rate and used by shops and establishments such as hotels, restaurants and neighbourhood sweetmeat shops etc. Before the government took up the cleansing of the consumer base, many subsidised domestic cylinders were being diverted for commercial use. The government currently transfers Rs 184. 29 per cylinder as subsidy.

“Nearly 6.3 million new LPG connections have been released to poor families in 2015-16… We have set a target to provide 50 million LPG connections over a period of three years to poor households, with a budgetary support of Rs 8,000 crore,” he said, adding that the 15 million target for 2016-17 was achieved in less than eight months. Read more

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