New Delhi, Aug. 15: The country has saved Rs 15,000 crore since the government started transferring cooking gas subsidy directly into consumers' accounts.
The move helped to stop black-marketing and diversion of subsidised cooking gas. Around 20 lakh people have also voluntarily given up LPG subsidy, helping to widen the reach of the scarce fuel..
"We brought direct cash benefit transfer and took advantage of bank accounts opened under Jan Dhan Scheme and Aadhaar numbers to give subsidy straight to consumers. Because of this, middlemen and black marketers have been hit," Prime Minister Narendra Modi said.
"We corrected the system and Rs 15,000 crore, which was stolen every year in the name of gas subsidy, has been saved," Modi said while addressing the nation on its 69th Independence Day.
Of 15.65 crore active domestic LPG consumers, 13.8 crore have joined the scheme and are receiving the subsidy directly in their bank accounts.
Since the launch of the scheme, 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 rates and the market price.
The scheme was launched in 54 districts on November 15, 2014, and extended to all over the country from January 1, 2015 to cut diversion to segments such as restaurants and other commercial establishments.
LPG subsidy payout from the Union Budget in 2014-15 was Rs 40,591 crore against a dole of Rs 52,231 crore in 2013-14, a saving of Rs 11,640 crore.
Modi said he had requested well-off people who can afford to pay the market price, to voluntarily give up their subsidy to help extend its reach to the most needy.
"About 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 families consume an average of eight cylinders per annum and at the average subsidy rate of Rs 200 per bottle, the savings amount to about Rs 320 crore.
At present, a household is entitled to receive subsidy to buy up to 12 cylinders of 14.2-kg each every year. Cash advance is transferred into the beneficiary account on first enrollment and another installment is given the moment it is used to buy an LPG refill.
The consumption of non-subsidised cooking gas grew by a record 35.3 per cent during the April-June quarter this year because of the direct benefit scheme.
The 35.3 per cent growth in April-June 2015 and 28.2 per cent in June is in stark contrast to the 11.9 per cent contraction in consumption in the corresponding period of 2014-15, Petroleum Planning and Analysis Cell (PPAC), said in a report.
Subsidised LPG use has grown 7 per cent in the current financial year till June.
"Even after PAHAL has weeded out duplicate connections, domestic LPG use is witnessing continuous growth for such a long period, which may be due to the release of new connections and increased use," PPAC said.
The three oil marketing companies released 4.3 million new connections and 2.6 million double-bottle connections during the April-June quarter of 2015.