Direct transfer of LPG subsidy saved govt Rs21,261 crore

Tribune News Service

New Delhi, August 23

The government today reiterated that the Direct Benefit Transfer of LPG (DBTL) — (PAHAL) mechanism — made it possible to block 3.34 crore duplicate, fake and inactive domestic LPG connections and the estimated savings due to blocking of these connections was Rs 21,261 crore.

The Petroleum Ministry was responding to reports about the CAG report stating that direct LPG subsidy savings was less than the government’s claim.

The government said before DBTL, all or many of these 3.34 crore consumers would have continued to purchase subsidised cylinders from the distributors. But for the blocking of these accounts, the subsidy bill would have been much higher despite fall in crude oil prices.

As a result of implementation of DBTL (PAHAL) mechanism, it became possible to block these 3.34 crore LPG connections as the subsidy was transferred in the accounts of only those consumers who had registered under PAHAL and who have been cleared after de-duplication exercise, the government said.

The Petroleum Ministry pointed out that concrete evidence of successful elimination of bogus connections is seen in the phenomenal growth of non-subsidised commercial LPG sales which have registered an increase of 39.3% in the period April 2015 to March 2016. This is in contrast to the pre-PAHAL experience when commercial sales growth was negligible or declining.

It stressed that the saving from implementation of DBT cannot be correctly computed merely by reference to the total consumption in a year or the total expenditure on subsidy. If the DBT had not been implemented, the outgo on the subsidy would have been higher by Rs 14,818 crore in 2014-15 and Rs 6,443 crore in 2015-16.

“Hence the total savings from the elimination of fake/duplicate/ghost connection as a result of implementation of DBT for the two years together, as calculated above, is estimated at more than Rs 21,000 crore,” the government said.