Panel recommends reinstatement of DBTL scheme

Recommendation made as scheme prevents pilferages

Months after the scheme to pay LPG users cash subsidy was put on hold, an expert committee has recommended its reinstatement after streamlining some processes, as it helps prevent pilferages.

The Direct Benefit Transfer for LPG (DBTL) scheme was rolled out in 291 districts from June 1, 2013 in six phases to do away with the practice of selling the fuel at below cost rates. About Rs 5,400 crore was transferred to more than 2.8 crore LPG consumers across the country.

However, the scheme, which provided for cash transfer only to customers having an Aadhaar number, was put on hold on March 7 following complaints that many consumers were left out because they either did not have the unique identification number or a bank account.

"While preliminary results indicated that the scheme met its primary objective of curbing leakages in the distribution system, the speed at which it was rolled out and inclusion of low Aadhaar districts gave rise to consumer grievances," the panel headed by Prof S G Dhande, former Director of the Indian Institute of Technology, Kanpur said in his review of DBTL.

"The DBTL scheme was successful in achieving its objectives, viz. reducing diversion, eliminating ghost/duplicate connections, and improving LPG availability," the report said, adding that the scheme promotes enhanced financial inclusion.

Stating that the scheme design was "very robust and scalable" which prevents leakages, it suggested some systemic changes and enhancements to mitigate the hardships reported by the LPG consumers.

It recommended a centralised grievance redressal mechanism as consumers, particularly the illiterate, face difficulties obtaining an Aadhaar number in some places and seeding the number in bank accounts and LPG databases.

Under DBTL, consumers received an advance of Rs 435 on joining the scheme. Consumers used this money to buy a LPG cylinder at the market price of Rs 905 per 14.2-kg bottle in Delhi as against a subsidised rate of Rs 411 they were paying previously.

The committee felt that this amount should be raised as in some months the subsidy or the difference between the subsidised retail price and the market price was as high as Rs 800.

It also recommended that the launch of DBTL should be preceded by a three month preparatory period during which there should be an extensive communication campaign, enrolment and seeding of Aadhaar in the LPG/bank database.

The committee said it received complaints regarding consumers not being able to open bank accounts in remote villages and the inconvenience faced by them in withdrawing the subsidy credited in their account due to poor accessibility of branches/banking facilities.

It recommended that cooperative banks and post offices should join the banks, and post offices should roll out micro ATMs through the core banking system.

The panel also suggested reducing the VAT on LPG.