New subsidy regime in
New Year: LPG sop will go directly to accounts; pilot project starts today
NEW DELHI: All
consumers will have to buy cooking gas at market rates from New Year's Day as
the government has issued firm instructions that the subsidy will be
transferred directly to bank accounts as it seeks to end illicit supplies to
restaurants, cars and factories, besides slashing the subsidy bill and boosting
private investment.
After recently
eliminating the diesel subsidy, which had ballooned to Rs 62,837 crore, Oil
Minister Dharmendra Pradhan has now ordered state oil companies to ensure that the scheme — which is being launched as a pilot
on Saturday for 2.33 crore customers in 54 districts — is smoothly expanded to
the entire country on January 1, 2015.
Some oil industry
executives had expressed doubts about the successful rollout of the scheme to
the entire country in barely six weeks of the launch in 54 districts after the
UPA government botched up the programme after expanding it to 291 districts
just before the general election. It had been forced to withdraw the programme after Congress leaders said it was
costing them votes.
The oil ministry is,
however, confident about success this time around. "The old DBTL (direct
benefit transfer of LPG) scheme failed because Aadhaar number was made
mandatory to avail subsidy. We have modified the scheme so that the consumer
will not face any difficulty in getting subsidised cylinders," Pradhan
told ET.
Under the modified
DBTL, a consumer will be eligible for subsidised LPG cylinders even without the
Aadhaar number, Pradhan said.
Embracing DBT
Principle
Consumers without the
unique ID will also receive cash directly in their bank accounts. They can
switch to Aadhaar-based cash transfers once they have been enrolled by
informing dealers and banks.
Customers have six
months to tell LPG dealers their bank account numbers without losing the
subsidy amount. While subsidised cylinders will be delivered to them in the
first three months, they will have to buy at market rates after that. The The
subsidy will be remitted to their bank accounts within the next three months,
officials said.
For the first subsidy
payment, the money will be transferred to the bank account of consumers as soon
as they make the first booking for a cylinder after joining the scheme, prior
to delivery. This advance ensures that consumers have extra cash to pay for the
first cylinder at market price. The permanent advance shall be notified for
consumers now joining the scheme separately.
The move reflects the embrace of the direct benefits transfer
principle introduced, albeit with limited success, by the UPA government.
Aadhaar has meanwhile covered more than half the country's population.
"The UIDAI
(Unique Identification Authority of India) has, till date, issued over 70.7
crore Aadhaar numbers," the government said in a release on Friday.
"Nine states/UTs including Andhra Pradesh, Kerala, Delhi and Himachal
Pradesh have crossed 90% Aadhaar coverage, while a further seven states/UTs
have Aadhaar coverage of between 70% and 90%."
In the 54 districts in
which the pilot is being launched, 95% of consumers already have Aadhaar
numbers. The new scheme ensures that consumers receive SMS alerts on their
registered mobile numbers at every stage of enrollment in the scheme.
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