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Business News/ Politics / Policy/  Direct transfer of LPG subsidies from 1 June
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Direct transfer of LPG subsidies from 1 June

The next phase of the direct transfer scheme will include 78 more districts from July

Oil minister M. Veerappa Moily. Photo: Pradeep Gaur/Mint (Pradeep Gaur/Mint )Premium
Oil minister M. Veerappa Moily. Photo: Pradeep Gaur/Mint

(Pradeep Gaur/Mint )

New Delhi: The government will go ahead with plans, behind schedule by around two weeks, to directly transfer cooking gas subsidies to individual bank accounts in 20 districts across the country from 1 June, but was non-committal about a wider roll-out.

Some 89% of the population in these districts have an Aadhaar unique identity number, and 52% of these numbers have been matched with a database of liquified petroleum gas customers, oil minister M. Veerappa Moily told reporters on Wednesday.

“We expect that 80-90% of the seeding will be done. The consumers also have some responsibility to get Aadhaar numbers and bank accounts linked," said Moily. “It is like voting; it can’t be done 100%."

The government will provide a grace period of three months from the start of the direct cash transfer programme on cooking gas since only 15% of beneficiary bank accounts have been linked with Aadhaar numbers. Consumers without Aadhaar numbers or unlinked bank accounts will get subsidized cylinders for three months. Those without Aadhaar-linked accounts after that period will have to pay market prices.

After the first phase of the direct cash transfer scheme, which was flagged off in January in around 40 districts, the next phase will include 78 more districts from July, covering nearly one-fifth of the country.

Moily declined to specify a time frame for a national implementation of the project. “It will happen in some months," he said. “We will first see the technology, review the process, and then roll out nationally."

The government proposes to transfer the subsidy amount to consumer bank accounts as soon as the previous gas cylinder is delivered. “This is to reduce their financial burden when they purchase the first LPG (liquefied petroleum gas) cylinder after launch of scheme at market rate," it said in a statement.

Of the total 140 million cooking gas connections in the country, the oil ministry has blocked 6.3 million in the past year out of 25 million it found to be suspicious. A back-of-the-envelope calculation shows the government might have saved around 2,000 crore in subsidy on these connections.

The direct benefits transfer scheme, seen as a potential poll plank ahead of the 2014 general election, is largely restricted to pension and scholarships schemes now, while the more complex welfare schemes on food and fertilizers have been left out as the administration fears a political backlash.

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Published: 15 May 2013, 11:46 PM IST
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