Centre allocates Rs 4,000 crore for Direct Benefit Transfer of LPG subsidy

Lower subsidy allocation for disbursing new connections to poor indicates saturation of new PMUY beneficiaries

There has been an allocation of Rs 4,000 crore for Direct Benefit Transfer (DBT) of cooking gas subsidy in the Budget 2022-23. This is an increase over the Rs 3,400 crore allocated for the same purpose in the revised estimates of 2021-22.

The government has not been bearing any subsidy on Liquefied Petroleum Gas (LPG) since May 2020 and the subsidy allocation is being used for moderating freight costs. This helps lower the cost of LPG to consumers in areas further away from LPG depots. The higher allocation in the coming budget is due to more expensive transport costs.

Allocation for an additional subsidy on LPG cylinders, that is payable to the North Eastern Region, has also been raised from Rs 391 crore in 2021-22 to Rs 811 crore in 2022-23. This too is on account of higher transport costs that will be incurred in making the LPG cylinders reach beneficiaries.

The allocation for disbursing new LPG connections to poor households under the Pradhan Mantri Ujjwala Yojana (PMUY) has been halved this time. Budget 2022-23 has provisioned Rs 800 crore, down from Rs 1,618 crore in the revised estimates of the Budget 2021-22. This is an indication that PMUY is nearing saturation with domestic LPG penetration reaching over 99 per cent of the country according to official estimates.