DBT scheme for LPG help save Rs 15,000 crore in a year

New Delhi: The programme to pay cash subsidy to cooking gas consumers directly in their bank accounts has helped save about Rs 15,000 crore by stopping black marketing and diversions, Prime Minister Narendra Modi said on August 15. In his address from the ramparts of the Red Fort on the 69th Independence Day, Modi said about 20 lakh people have voluntarily given up subsidy on LPG, helping widen the reach the scarce fuel.

The Direct Benefit Transfer on LPG, which has been recognised by the Guinness Book of World Records as the largest cash transfer programme in the world, has eliminated "middle-men and black marketers" and ensured the fuel is delivered to right people, he said. Since the launch of DBTL, now named PAHAL, domestic LPG all over the country is sold at market price. Households get cash subsidy in their bank accounts to make good the difference between old subsidised rate and market price.

"We brought DBTL and took advantage of bank accounts opened under Jan Dhan Scheme and Aadhaar numbers to give subsidy straight to consumers," Modi said. DBTL has stopped diversions of "about Rs 15,000 crore of LPG every year," he said. Out of 15.65 crore active domestic LPG consumers, 13.8 crore have joined the DBTL and are getting subsidy in their bank accounts.

The scheme was launched in 54 districts on November 15, 2014, and extended to all over the country from January 1, 2015 with a view to cut diversion and subsidised fuel being consumed by unintended segments like restaurants and other commercial establishments. LPG subsidy payout from Union Budget in 2014-15 was Rs 40,591 crore as against a dole of Rs 52,231 crore in 2013-14, a saving of Rs 11,640 crore.

Modi said he had requested the well-off people who can afford to pay market price, to voluntarily give up their subsidy to help extend its reach to the most needy. "20 lakh people have given up LPG subsidy voluntarily," he said. Middle class families and teachers are among the people who have left subsidy. Assuming that each of these consume an average of 8 cylinders per annum and at the average subsidy rate of Rs 200 per bottle, the saving amounts to about Rs 320 crore.

Presently, a household is entitled to receive subsidy to buy up to 12 cylinders of 14.2-kg each every year. Cash advance is transfered into the beneficiary account on first enrollment and another installment is given the moment it is used to buy a LPG refill.