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In a major move towards better targeting of the subsidy on cooking gas, the government today decided to move towards its cash transfer. Consumers in 20 districts will now get the subsidy amount on each liquefied petroleum gas (LPG) cylinder credited directly to their bank accounts from June 1.
Consumers without their Aadhaar numbers seeded with bank accounts have been given three months to comply with the condition. During this period, they will continue to get subsidised cylinders. “The decision was taken at the Cabinet Committee on Political Affairs. A further extension will be considered by the government later,” said an official.
The move will benefit oil marketing companies (OMCS), since their dealers will get the market rate for selling all LPG cylinders. Currently, the subsidy from the government comes to OMCs after a lag.
Extension of the Direct Benefits Transfer (DBT) programme to LPG gives the programme its biggest coverage so far. This was earlier scheduled to be launched on May 15. “Seeding of Aadhaar numbers with bank accounts is still low, at 13 per cent,” said an official. Seeding of the LPG data base with Aadhaar numbers is just above 50 per cent, making things difficult for the authorities to launch the programme at one go. Initially, the DBT in LPG was to be introduced from January 1 but the OMCs had sought an extension.
DBT is the government's second major move at reducing the subsidy on LPG. Last year, it had capped the number of subsidised cylinders for each household to six in a year; in January, this was revised to nine. Consumers (only homes, not commercial ones) need pay Rs 378.38 less than the current market rate for these nine cylinders in a year. With DBT, consumers will pay the current non-subsidised price of Rs 847 for all cylinders. The government will credit the subsidy into their bank accounts directly, once the consumer books a cylinder.
Direct cash transfer of the LPG and kerosene subsidy is expected to save Rs 15,000 crore in a year for the government. The subsidy on LPG alone was Rs 39,558 crore in 2012-13. Union petroleum minister Veerappa Moily had earlier said the DBT on LPG would cover the entire country by October. The OMCs have a database of 140 million customers. To raise the seeding, the ministry is preparing a massive print and audio-visual campaign on the issue.
The 20 districts involved in the first phase cover Andhra Pradesh, Daman and Diu, Goa, Himachal Pradesh, Karnataka, Kerala, Maharashtra, Pondicherry, Sikkim and Tripura.
The National Payments Corporation of India and State Bank of India would take charge of disbursement of money to customers’ accounts.
Though the petroleum ministry had earlier given a choice of using the National Population Register numbers, in addition to Aadhaar, for transfer of the LPG subsidy, the low seeding level is a major hindrance.
Other Cabinet decisions
UIDAI Phase-IV: The Cabinet Committee on Unique Identification Authority of India allowed the authority to spend Rs 3,436.16 crore on issuing Aadhaar cards and UID numbers to 400 million citizens under phase IV of the project, which is to start soon.
Ports in West Bengal and Andhra Pradesh: West Bengal and Andhra Pradesh would have major ports, with an estimated cost of around Rs 15,820 crore. The new port in West Bengal, which will have a capacity of 54 million tonnes per annum (mtpa), requires an investment of around Rs 7,820 crore, said Information & Broadcasting Minister Manish Tewari. The one in Andhra Pradesh, whose projected capacity is around 50 mtpa, will entail an investment of about Rs 8,000 crore, said the minister. India has 12 major ports now.
Aviation Hubs: A wide-ranging policy has been cleared to create international and regional aviation hubs. The hubs would have facilities such as immigration, customs, provisions for visa-on-arrival and foreign exchange.
National Skill Development Agency (NSDA): A proposal to create an autonomous body, NSDA, by subsuming the Prime Minister’s National Council on Skill Development, the National Skill Development Coordination Board and the office of the adviser to the PM on skill development has been cleared. NSDA is to provide a single point focus to ensure that skills and standards meet sector-specific requirements benchmarked to international standards.
Amendments in Cooperative Societies Act: Amendments to the Multi-State Cooperative Societies (Amendment) Bill, 2010, was approved. The amendments propose that the Central Registrar of Cooperatives can declare as sick a cooperative society that has become unviable. A rehabilitation scheme would be prepared.
Sick fertiliser units: The revival of closed units of Fertiliser Corporation of India Ltd (FCIL) at Sindri, Talcher, Ramagundam, Gorakhpur and Korba was cleared.
Office of profit: The Cabinet approved an amendment to the Parliament (Prevention of Disqualification) Act, 1959, under which chairmen of the National Commission for Scheduled Tribes and National Commission for Scheduled Castes would be kept out of the purview of the Office-of-Profit rule.
Water conservation year: A proposal to declare 2013 as the Year of Water Conservation has been approved. Mass awareness programmes would be undertaken to encourage people to conserve water.
LNG land: The Cabinet approved leasing of Ennore Port Ltd’s land for a Rs 4,320-crore liquid gas (LNG) import terminal being built by state-owned Indian Oil Corp, which plans to build a 5-million-tonne a year LNG import facility at Katupalli.
