Households are now entitled to get 12 cylinders of 14.2 Kilogram each at subsidised rate of Rs 419.26, while the market price is Rs 608 per cylinder.
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This would, however, be done initially on a “self-declaration basis while reserving cylinders from January 2016 onwards.”. After appealing people to surrender their subsidies for the greater interest of the nation, the Ministry of Petroleum Affairs issued a new notification which would automatically exempt those families whose annual taxable income is more than Rs 10 lakhs.
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Currently, there are 16.35 crore LPG consumers in India. There could also be significant overlap between the population set of income above Rs 10 lakh and the set of 57.5 lakh consumers who have already given up subsidy voluntarily under “GiveItUp” campaign of LPG; and hence subsidy savings will be lower to that extent, ICRA observed.
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The previous government, of the Congress-led United Progressive Alliance, had restricted the number of subsidized domestic cylinders per household to six every year in September 2012, revising it to nine the following January.
During April-September, the outgo on LPG subsidy was Rs 8,814 crore, largely the result of the dramatic slump in global crude oil prices. The central government earlier in the day disallowed availing of LPG subsidy to anyone who has a taxable income of above 10 lakh per annum.
The government had also launched a scheme for people to give up their subsidies so that the less privileged would benefit.
The petroleum ministry stated it was felt that consumer in the better earnings bracket ought to get LPG cylinders at the market charge. There aren’t any estimates of how many are above Rs 10 lakh taxable income bracket.
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The routing of LPG subsidy through DBT channels has helped the government save Rs 15,000 crore in fiscal year 2015. Evidently, the progress of the campaign, as indicated by this number, didn’t satisfy the government prompting it to take the efforts to next level i.e forced giving up of subsidy. This enables provision of LPG, a clean fuel, to poor households by replacing the conventional fuels such as kerosene, coal, fuel wood and cow dung.
