The plan is not to cap subsidies but to restrict it to the deserving only
After the success of the GiveItUp campaign that led to 1.01 crore LPG consumers voluntarily surrendering their subsidies, the government is now determined to take the process of limiting the sop to the really needy to its logical end. Petroleum minister Dharmendra Pradhan said on Tuesday that the plan was to reduce the number of subsidised LPG consumers by another 2-2.5 crore from 15.2 crore at present. With the policy that households with annual income above R10 lakh is ineligible for LPG subsidy, the government would identify such households still enjoying it by way of ascertaining the valuable physical assets in their possession, the minister said.
He, however, said the income tax data might not be used for this purpose, as tax filings are “confidential” in nature. “We may look at physical assets of a consumer to determine if he belongs to the affluent class,” the minister said at the Indian Express Group’s Idea Exchange programme.
A major feat of the Narendra Modi government, Pradhan said, was that it added more than 3.7 crore new domestic LPG consumers in just two years to take their number to 16.7 crore. Millions of households, especially women who have been exposed to the smoke from chullahs fuelled by firewood/ dung, have been freed from the serious hazard, the minister said.
In Budget 2016-17, finance minister Arun Jaitley promised to provide cooking gas to the poorest 50 million households over the next few years.
Despite steps taken by the government to restrict LPG subsidy to the needy, the consumer base for cooking gas expanded by a solid 3.7 crore to 16.7crore in the two years of the Modi government, the fastest growth in at least the last couple of decades.
Pradhan, also Rajya Sabha MP from Bihar, claimed that all parliamentarians have given up their cooking gas subsidy after Prime Minister Narendra Modi’s appeal. He recalled Congress leaders such as Mallikarjun Kharge, AK Antony and Ashok Chavan telling him that they surrendered their subsidies soon after the PM’s appeal.
Interestingly, when the petroleum ministry carried out a survey of nearly 1 lakh LPG consumers residing in affluent areas such as South Mumbai, South Delhi, Salt Lake in Kolkata and a few areas in Chennai, it came to fore that just 3% of them have surrendered the cooking gas subsidy. “The government wants to give LPG subsidy to the poor. We will come out with a mechanism to stop giving subsidy to affluent households,” the minister said.
When the Modi government came to power in May 2014, there were about 17 crore domestic cooking gas consumers on the roll. After the launch of PAHAL or the direct benefit transfer of LPG (DBTL) scheme, nearly 3 crore duplicate/fake consumers were weeded out. Currently, there are 16.7 crore domestic consumers, of which 15.2 crore get the subsidy. Another 1.01 crore have voluntarily given up the subsidy, while 0.5 crore consumers did not link their bank account with the LPG connection, and virtually stopped getting subsidy.
Talking about pruning kerosene subsidy, Pradhan said that the government has asked the “states to put in place beneficiaries list” with a view to target the subsidy to those who need it for cooking/lighting. “We have asked the states to tell us who should get kerosene subsidy. They are also losing revenue. We are trying to make a gateway this financial year for targeted distribution of kerosene subsidy,” the 46-year-old minister said. Nearly 30-40% of the subsidised kerosene is being black-marketed.
The government had decided to provide a fixed subsidy of Rs 18 per kg under DBTL during April-October, which has been revised to Rs 15 per kg from November 2015 onwards. The average subsidy on domestic LPG reduced by about 63% to Rs 11.08 a kg in FY16 against Rs 29.63 per kg in FY15. This made the government revise the provision for LPG subsidy downwards by Rs 3 per kg. The benchmark Brent crude oil price fell nearly 44% to an average of $48.73 per barrel in FY16 against $86.60 per barrel in FY15.