No subsidised LPG for taxpayers earning over Rs 10 lakh a year

Taxpayers with annual income more than Rs 10 lakh will not get subsidised cooking gas (LPG) from next month.

At present, all households are entitled to get 12 cylinders of 14.2-kg each at a subsidised rate of Rs 419.26, while the market price is Rs 608. The government had asked well-off people to voluntarily give up subsidised LPG, and buy cooking fuel at the market price.

So far, over 5.75 million LPG consumers, out of nearly 150 million, have given up subsidies.

"While many consumers have given up subsidy voluntarily, it is felt that consumers in the higher income bracket should get LPG cylinders at the market price," oil ministry said in a statement.

The government, it said, "has decided that the benefit of the LPG subsidy will not be available for LPG consumers if the consumer or his/her spouse had taxable income of more than Rs 10 lakh during the previous financial year, computed as per the Income Tax Act, 1961."

This would be done initially on "self-declaration basis while booking cylinders from January onwards." To cut the subsidy bill, and to reduce the fiscal deficit, the previous UPA government had restricted the number of subsidised domestic cylinders per household to 12 every year in January 2014. The subsidy for 12 cylinders in a year is paid directly in the bank account of customers.

The subsidy payout on LPG in 2014-15 was Rs 40,551 crore, which this financial year will be less than half as oil prices have slumped drastically. During April-September, the subsidy outgo was Rs 8,814 crore.

At present, there are 163.5 million LPG consumers in the country. However, only 147.8 million consumers enrolled for the Direct Benefit Transfer on LPG (DBTL) scheme which eliminated duplicate and inactive customers. "The objective of the scheme was to ensure that the subsidy benefits go to the targeted group only," the statement said.

India had 32.5 million tax payers in 2011-12. Of these, 5.6 per cent were above Rs 10 lakh taxable income bracket. This means, 1.82 million people had taxable income of Rs 10 lakh or more that year.

COOKING GAS GETS DEARER

• 163.5 mn total LPG consumers in India
   
• 147.8 mn LPG consumers getting direct transfer of subsidy to their bank accounts
   
• 5.75 mn have voluntarily given up LPG subsidy after Prime Minister Narendra Modi's appeal
   
• Rs 40,551 crore LPG subsidy payout in 2014-15
   
• At present, all households are entitled to get 12 cylinders of 14.2-kg each a year
   
• Rs 419.26 subsidised rate of a cylinder, compared with market price of Rs 608
   
• There were 32.5 mn taxpayers in India in 2011-12. Of this, 5.6% earned more than Rs 10 lakh a year