Own a car? No subsidised LPG for you

The government had last year excluded those with an annual income of more than Rs 10 lakh from LPG subsidy

If you own a car, you might soon have to forgo the subsidy on your LPG cylinders.

By eliminating 36 million fake connections through Direct Benefit Transfer for LPG (DBTL), the government has saved nearly Rs 30,000 crore of cooking gas subsidy.

Now, it is planning to strike car owners off the subsidy list.

Sources in the government said the idea was in its initial stage.

The government had collected registration details of cars from regional transport offices (RTO) in a few districts.

If it worked out, there could be huge savings on subsidy. A lot of people who have two or three cars were also taking subsidy at present.

The government had last year excluded those with an annual income of more than Rs 10 lakh from LPG subsidy.

For deciding on the income cap, the Ministry of Petroleum and Natural Gas had taken details of LPG customers from the income tax department. This included PAN, residential address, and mobile number.

However, industry experts believe getting details of vehicle registration will be tough, as these need to be counter checked with address.

The government has taken a series of steps, such as launching the “GiveItUp” campaign, rolling out DBTL in all districts, and linkage of LPG connection with Aadhaar, for better targeting of subsidy.

With all these efforts, the government was successful in detecting at least 75 million fake or duplicate connections, said sources.

As of November, India has around 251.1 million domestic LPG consumers - out of which 121.2 million are of IOC, 64 million are of BPCL, and another 65.9 million are of HPCL.

The Narendra Modi government was also successful in adding another 31.6 million Below Poverty Line customers through its flagship social sector scheme Pradhan Mantri Ujjwala Yojana (PMUY).

Under the DBTL, the subsidy amount is directly transferred to the accounts of the beneficiaries. This is considered the world’s largest cash-transfer programme.

The figures given by the DBT website indicate that out of the total savings of Rs 57,029 crore in the past three financial years, Rs 29,769 crore came from the Pahal scheme only.

Of the remaining, Rs 14,000 crore came from food and public distribution and Rs 11,741 crore from the employment-guarantee scheme.

At present, more than 80 different schemes from 17 ministries are covered under the DBT.

Though DBTL was initiated by the United Progressive Alliance government on a pilot basis, it was taken up on a larger scale as Pahal in November 2014, after Dharmendra Pradhan took charge as the petroleum minister.

However, in a report last year, the Comptroller and Auditor General of India had stated that the savings estimate by the government on DBTL was “exaggerated” since most of it came from the drop in international prices.

With global prices going up over the past few months, overall LPG subsidy is expected to touch Rs 15,000 crore during the current financial year, against the expected Rs 13,000 crore.

“Within a month’s time, the subsidy on LPG has increased from Rs 100 per cylinder to about Rs 200 per cylinder.

"Hence, it is necessary to have checks such as denying it to car owners if the government wants to bring down and target subsidy at citizens with the lowest incomes,” said an industry expert.

Photograph: Rupak De Chowdhuri/Reuters