• Ending support to high-income customers: LPG subsidy cut off to 7 lakh consumers

    More than 7 lakh customers with above Rs 10 lakh annual income have so far been identified and stopped from availing of cooking gas subsidy under the government programme to end state support to high-income consumers, officials said.

    Since the beginning of 2016, those who earn a taxable annual income of overRs 10 lakh, or have a spouse with that income, must pay market price for cooking gas.

    For continuing to receive the subsidy, every consumer has to submit an affidavit to the gas agency, declaring the annual income to be lower than Rs 10 lakh. The government database of income tax payers and declarations by consumers have been used to block subsidy to these consumers, officials and state oil firms’ executive said, adding that the higher-income category may have about 20 lakh consumers.

    Recently, the government has also allowed oil companies to increase the price of cooking gas by Rs 2 per cylinder, indicating its determination to reduce the subsidy bill. This is in addition to the decision to raise 25 paise per litre on kerosene a month for ten months.

    All these steps are part of the government’s larger drive to shrink petroleum subsidy and keep it targeted towards those who can’t afford to pay the market price for fuel. An oil price crash in the last two years has also aided the government effort to curb subsidy.

    By directly transferring subsidy to cooking gas consumers’ account, the state oil companies have been able to weed out about 3.25 crore duplicate or inactive consumers, enlarging subsidy saving.

    A little more than 1 crore consumers have also given up subsidy voluntarily, although they can claim it back after a year of surrender. As a result, the cooking gas subsidy fell sharply to Rs 27,571 crore in 2015-16 from Rs 76,285 crore in the previous year.

    For July, the cash transfer to a customer under direct benefit transfer scheme will be Rs 116.34 per cylinder. Milan Lucic Womens Jersey

    Share This