1. DBTL weeds out 3 crore bogus LPG connections

DBTL weeds out 3 crore bogus LPG connections

Commercial use of cooking gas picks up as leakage plugged

By: and | New Delhi | Updated: April 27, 2015 5:07 AM
LPG subsidy

Out of 15 crore subsidised LPG connections, 12 crore beneficiaries have authenticated their connections under the DBTL by linking their bank accounts. (Reuters)

The Direct Benefits Transfer for LPG scheme or DBTL (also known as PAHAL), billed as the world’s largest cash transfer programme, has weeded out over three crore bogus subsidised domestic cooking gas connections, saving billions of rupees for the exchequer, a senior official said.

Out of 15 crore subsidised LPG connections, 12 crore beneficiaries have authenticated their connections under the DBTL by linking their bank accounts. Of these, about 8.5 crore have also linked their unique identification (Aadhaar) number to bank accounts. “The remaining three crore could be bogus connections as nothing was done by the beneficiaries to validate these,” DBT mission director DK Mittal told FE, declaring the direct benefit transfer for LPG subsidy “a complete success”. These three crore connections, he said, were assumed to have been cancelled.

“The fact that the use of commercial cylinders has gone up in recent months is in itself an indication (that subsidised cooking gas was earlier being diverted for commercial use),” he added.

According to petroleum ministry data, the growth in consumption of subsidised domestic cooking gas has declined since the launch of DBTL. The growth was just 3% in March, compared with 6% in February, while average growth between April 2014 and February 2015 was 12%.

In contrast, commercial (unsubsidised) LPG consumption grew steadily since the DBTL launch — growth, for instance, was 27% in February and 28% in March 2015.  This, sources said, is a clear indicator of bogus domestic connections (misused by commercial users) having been weeded out.

Domestic LPG

Introduced by the UPA government, the Modi government re-launched DBTL in 54 districts on November 15, 2014. The scheme was rolled out to the entire India on January 1, 2015.

The overall under-recoveries (or losses for selling fuel below market cost) of PSU oil marketing companies fell from R1.6 lakh crore in 2012-13 to R1.4 lakh crore in 2013-14 but those on LPG increased from R39,558 crore to R46,558 crore in the period.

The government is believed to be looking at annual savings of Rs 10,000-12,000 crore in the subsidy on cooking fuel, thanks to
the DBTL scheme.

While leakages have been plugged, the government is now aiming at persuading about one crore well-to-do people to give-up their LPG subsidy by March 31 to ensure better targeting of the benefit meant for the poor. The initiative could help save at least Rs 1,000 crore this year, a senior finance ministry official said. The government has reached out to corporates to make this initiative a part of their CSR plan to motivate people.

Subsidies are a major drag on government finances as they limit resources available for building roads, ports and other infrastructure projects needed for faster economic growth. Expenditure on major subsidies – for food, fertiliser and fuel – was Rs 2.55 lakh crore (2% of GDP) in FY15 and is projected to decline to Rs 2.27 lakh crore (1.6% of GDP) in FY16, mainly due to lower fuel subsidy after deregulation of diesel, fall in crude prices and plugging of LPG leakages.

The success of the DBT scheme for LPG has given confidence to the government to aim higher. Mittal said the government would start rolling out the direct benefit transfer scheme for food and kerosene in phases from next month. The government plans to give food subsidy in cash for urban beneficiaries, while the existing system of subsidised foodgrain would continue in rural areas with biometric validation. The DBT for fertiliser could start in the later part of the year, he said.

When DBT is fully implemented for food, kerosene and fertiliser, Mittal said the government could save about Rs 70,000 crore in subsidy bill just by plugging leakages and reducing other costs.

However, given that state governments need to come on board to implement the larger schemes such as Food Security Act, repeating the success of DBT for LPG subsidy won’t be easy, analysts believe.

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  1. C
    May 1, 2015 at 9:27 am
    Congress only talks good and does all bad they had 10 years to do lot of things only thing they did was scams and produced jokers like RaGa
    1. C
      May 1, 2015 at 9:30 am
      Yes read the article, Congress only talks good in meetings but destructs country on ground ; only thing they can implement is growth of anarchy, corruption and debt on country
      1. C
        Apr 27, 2015 at 7:20 am
        At least Some truely consistent Work BJP, Congress has BIG zero to show ; their contribution is dumbo !!!!
        1. S
          Apr 27, 2015 at 7:18 pm
          Read this report again. "Introduced by the UPA government, ..."
          1. R
            Rameswar Pattanayak
            Apr 27, 2015 at 3:27 pm
            This need to be strengthened by pursuing employees of corporate sector who are in receipt of reimburt of cost of 1 domestic LPG cylinder per month. Once doe, Govt should aim to reduce the cost of 5KG LPG cylinder price and make it available in open market. Since the subsidy stands @ 15 per KG and if the 5KG LPG cylinder can be available with @5 subsidy it will be a win win situation for every body.
            1. T
              trn T
              Apr 27, 2015 at 5:02 pm
              this was initiated by upa but had little time.
              1. R
                Rakesh Verma
                Apr 27, 2015 at 10:15 pm
                Linking of UID Adhar for DBTL has helped in identification of bogus consumers. Why not similarly link it with ry/wages for eradicating bogus (ghost) employees in govt. agencies like DDA, MCD etc.?
                1. T
                  t p
                  Apr 27, 2015 at 9:35 am
                  Excellent scheme to prevent misuse. Same way misuse of electricity, diesel, kerosene, ration- items be stopped, so that the tax payers need not to pay higher taxes @ 30%. If govt is sincere enough to prevent corruption & leakages, Tax rates can be below 15%.
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