Talks on with states on DBT scheme for kerosene: Pradhan

The petroleum ministry is in talks with state governments on drawing up plans similar to Direct Benefit Transfer of LPG (DBTL) for public distribution kerosene, Petroleum Minister Dharmendra Pradhan said on Monday.

Noting his ministry has asked state governments to identify the people who require kerosene subsidy in order to work out a similar cash transfer scheme, Pradhan said: "Let state governments prepare a list of whom they want to give subsidy."

"There is no dearth of kerosene for people who need the fuel," he told journalists on the sidelines of a seminar organised by his ministry.

The direct benefit transfer's effect is already showing up in the books of state-run oil marketing companies (OMCs).

There are no under-recoveries, or losses, on account of diesel and petrol, as these are market-linked but OMCs are facing under-recovery of Rs.18.51 a litre on sales of public distribution system (PDS) kerosene at below market rates, the petroleum ministry said earlier this month. The under-recovery on the fuel as on June 1 was Rs.20.10 a litre.

"Under-recovery for the full year 2014-15 was Rs.72,314 crore. The figure was Rs.1,39,869 crore in the 2013-14 fiscal," an official statement said.

Describing the government's Direct Benefit Transfer scheme as a "game-changer", Chief Economic Advisor Arvind Subramanian earlier this month said the fiscal impact of the DBTL scheme is estimated to have yielded savings of over Rs.12,000 crore in 2014-15.

"DBT is important not only for fiscal savings ... if the government can deliver these services it would legitimise the state, it would arrest the ongoing trend of de-legitimisation of the state the world over," Subramanian said at a roundtable here on "Direct Benefit and Basic Income Transfers" organised by the International Centre for Human Development.