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Rediff.com  » Business » Govt panel to review LPG subsidy scheme, expect result by May

Govt panel to review LPG subsidy scheme, expect result by May

March 13, 2014 15:51 IST

The 12-member panel will look at the difficulties consumers faced in receiving the subsidy after buying gas cylinders at market rates.  

A govt panel will study consumer issues related to LPG subsidyThe government has set up a committee to recommend changes in a scheme to pay the cooking gas subsidy into consumers’ bank accounts.  

The 12-member panel, headed by S G Dhande, former director of the Indian Institute of Technology, Kanpur, will look at the difficulties consumers faced in receiving the subsidy after buying gas cylinders at market rates.  

The scheme was launched last June and put on hold in January over difficulties in implementing it.  

Cash transfer was a significant reform measure of the United Progressive Alliance government to stop fuel subsidies reaching those who did not merit them.

Petroleum Minister M Veerappa Moily had said in January the government would save Rs 12,000-14,000 crore (Rs 120-140 billion) if cash transfers became universal.  

The scheme covers 291 of the country’s 640 districts. By the end of January, 17 million consumers had received Rs 3,000 crore (Rs 30 billion) in their bank accounts.

But without enough unique identity numbers under Aadhaar, and linked bank accounts, paying out the subsidy had become an issue.  

The Cabinet sought a review of cash transfers for cooking gas, which made up 80-90 per cent of the Centre’s direct subsidy payments across 26 welfare schemes announced since last January.

These include scholarships, pensions, maternity benefits, housing and unemployment assistance, and wages for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme.  

The review committee’ terms of reference include “consulting stakeholders to study the key issues and submitting recommendations on how to improve the scheme,” said a government official privy to the development.  

The official, who did not wish to be identified, added the committee had been asked to give its recommendations by May 31.  

With elections intervening, a new government will, therefore, take a call on the project that required consumers to get their Aadhaar numbers seeded with both gas dealers and bank accounts.

Surabhi Agarwal and Shine Jacob in New Delhi
Source: