regular-article-logo Saturday, 15 June 2024

Modi government hikes cooking gas subsidy for poor amid Opposition cry over high fuel prices

The Cabinet Committee on Economic Affairs raised the subsidy from Rs 200 per 14.2-kg cylinders for up to 12 refils per year to Rs 300 per bottle under the Ujjwala Yojana, which will benefit 9.6 crore families

Our Special Correspondent New Delhi Published 05.10.23, 09:37 AM
SOP before polls

SOP before polls Sourced by the Telegraph

The government on Wednesday raised the subsidy provided to poor women, who got free cooking gas connections under the Ujjwala Yojana, to Rs 300 per cylinder as it looked to blunt Opposition criticism of high fuel prices.

The Cabinet Committee on Economic Affairs raised the subsidy from Rs 200 per 14.2-kg cylinders for up to 12 refils per year to Rs 300 per bottle, Union information and broadcasting minister Anurag Thakur told reporters here.


The move will benefit 9.6 crore families.

Ahead of the assembly elections in five states, including Madhya Pradesh and Rajasthan, the government had in late August cut cooking gas price by Rs 200 per cylinder. After this, LPG cylinder price came down to Rs 903.

For Ujjwala beneficiaries, the price was Rs 703 after considering the Rs 200 per cylinder subsidy, which is directly paid into the bank accounts of connection holders. After the increase in subsidy, a 14.2-kg LPG cylinder will now cost Rs 603 for Ujjwala beneficiaries.

The move follows criticism by Opposition parties of high LPG price. Parties such as the Congress are promising LPG cylinder at Rs 500 if voted to power.

The hike in subsidy is being seen as an attempt to blunt that criticism. Thakur did not say how much additional subsidy outgo the move would entail.

For 2022-23, Rs 6,100 crore was provided for the Ujjwala subsidy, which rose to Rs 7,680 crore in the current 2023-24 fiscal (April 2023 to March 2024).

The fiscal cost to the exchequer would be around Rs 3,600 crore annually, said Madhavi Arora, an economist at Emkay Global Financial Services, according to Reuters.

“As elections are approaching, the government would not want higher inflation to offset their past and recent achievements,” Sunil Sinha, economist at India Ratings, told the news agency.

Turmeric push

The government has set up National Turmeric Board to promote production of the herb having medicinal value.

“With the focused activities of the board, it is expected that turmeric exports will reach $1billion by 2030,” a commerce ministry statement said.

Union minister Kishan Reddy said the decision fulfils the long-pending demand of the farmers of Telangana.

In 2022-23, an area of 3.24 lakh hectare was under turmeric cultivation with a production of 11.61 lakh tonne (over 75 per cent of global turmeric production). More than 30 varieties of turmeric are grown in over 20 states in the country.

Shell price rise

Shell India has hiked diesel prices by as much as Rs 20 per litre in less than a week’s time, but the dominant public sector fuel retailers continue to keep rates on freeze for a record 18th month in a row.

With international oil prices hovering around $90 per barrel, the India unit of the world’s second-largest oil and gas company last week started raising fuel prices by Rs 4 per litre every day, company dealers and industry sources said.

The result is Shell India, whose 346 petrol pumps are mostly concentrated in the southern and western states, is now selling diesel at Rs 130 per litre in Mumbai and Rs 129 in Chennai.

This compares to a price of Rs 106.31 a litre for petrol at public sector company’s petrol pumps in Mumbai and Rs 102.63 in Chennai. Diesel at PSU pumps costs Rs 94.27 a litre in Mumbai and Rs 94.24 in Chennai.

Follow us on: