Govt plans to re-launch benefits transfer in cooking gas distribution

The government proposes to re-launch the direct benefits transfer (DBT) scheme in liquefied petroleum gas (LPG) distribution. However, it did not clarify whether the benefit transfer would be linked to Aadhaar or unique identity number. The petroleum ministry also lifted the existing one-cylinder-per-month cap on subsidised LPG sales.

The proposal to restart DBT in LPG was part of an official statement released to announce the launch of the Prime Minister's Jan Dhan Yojana, a financial inclusion scheme, in Delhi on Thursday.

"The plan proposes to channel all government benefits to beneficiaries to such accounts and pushing the DBT scheme of the government, including restarting the DBT in LPG scheme," the release issued by the finance ministry read.

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Prime Minister Narendra Modi would dedicate mobile banking facility on basic mobile phones to the nation. The first phase of the scheme, to be implemented over the next year, would include universal access to banking facilities, providing bank accounts and debit cards with an inbuilt insurance cover.

Under a previous avatar of the DBT-LPG scheme, the government had transacted over Rs 5,000 crore to beneficiaries using the Aadhaar or unique identity number issued by the Unique Identity Authority of India (UIDAI) under the aegis of the Planning Commission. However, the scheme was put in abeyance by the Cabinet due to several ground-level implementation challenges. Concurrently, the Supreme Court had also asked the government not to make Aadhaar mandatory to avail government welfare payments.

There are nearly 160 million LPG connections across India at present. The subsidy extends to 12 cylinders a year. A subsidised cylinder currently costs Rs 414. The oil marketing companies (OMCs) lose Rs 448 on sale of each subsidised cylinder. Overall, under-recoveries on LPG sales stood at Rs 46,458 crore last financial year, roughly 33 per cent of total under-recoveries of Rs 1,39,000 crore reported by the three OMCs on sales of diesel, LPG and kerosene put together.

"The government has decided that while 12 subsidised LPG cylinders per annum will continue to be supplied to all domestic consumers, there will be no separate monthly restriction of one cylinder per month," the petroleum ministry said in a separate official statement on Wednesday.

This modifies the government's February 28 decision and removes the restriction. According to the statement, the decision will eliminate difficulties faced by LPG consumers, as the consumption of LPG cylinders is never one a month.