Govt buries panel?s income cap plan for LPG subsidy

While the panel has favoured this formula to make the government’s subsidy scheme more targeted, the Centre has quietly buried the proposal. If the House panel’s proposal is implemented, households with any one individual earning more than R 6 lakh a year would not eligible for subsidised cooking gas and would have to buy the fuel at market prices.

It is not clear if proposed formula would be more helpful to the government in curbing the subsidy outgo. The current proposal is to limit the subsidised cylinders to each household at nine.

Speaking to FE, the panel’s chairman Aruna Kumar Vundavalli said that the committee was unanimous over the proposal that people over a certain income level should be kept out of the subsidy scheme and wanted government to implement it as part of its exercise to target subsidy for petroleum products. “The panel has sought immediate acceptance of its recommendations but the petroleum ministry have sidelined the matter and did not even include it for further study,” he said.

Not to be let down, Vundavalli said the panel would once again push for acceptance of its decision on the issue without coming in direct conflict with the Centre.

The House panel on petroleum and natural gas, in its latest report, has recommended exclusion of individuals with an annual income of R6 lakh and above from getting any subsidy on domestic cooking gas. That includes people holding constitutional posts, public representatives like MP’s, MLA’s, senior government officials. The parliamentary panel’s conflict with the government is not new.

Recently, the standing committee on finance rejected the government’s move to raise FDI cap in insurance only to be sidelined by policy makers who introduced the Bill with proposal to raise the cap to 49%. Similar differences have also crept up between the panel and the government on pension, land acquisition, banking laws amendment bills.

?Parliament should have the right to go through executive and legislative decisions of the government otherwise what is point in having this democratic system,? senior BJP leader Yashwant Singh told FE. With regard to petroleum subsidy, the panel has also urged the petroleum ministry to device ways for better targeting of subsidies. The oil marketing companies (OMCs) incurred under-recoveries of R22,035 crore for the period from April to December 2012 on account of subsidy on domestic cooking gas.

In September, the government had restricted the supply of subsidised domestic LPG cylinders to six per household in a year, which saw stiff opposition.

The petroleum ministry has send a proposal to hike the cap on the number of subsidised cylinders from six to nine per per year.