LPG subsidy in bank accounts starting June

Anupama Airy

India, May 16 -- The government will, from June 1, start transferring cash into the bank accounts of 7.6 million consumers of subsidised liquefied cooking gas (LPG) in 20 districts across eight states and two union territories.

These are Andhra Pradesh, Daman and Diu, Goa, Himachal Pradesh, Karnataka, Kerala, Maharashtra, Punducherry, Punjab and Madhya Pradesh.

Announcing the rollout of this scheme in New Delhi on Wednesday, petroleum minister Veerappa Moily said, "Domestic LPG consumers will get an advance of R435 into their bank accounts as soon as they book the first subsidised cylinder. As soon as the first cylinder is delivered to such consumers, subsidy eligible on date of delivery will again get credited in the bank account that will then be available for the purchase of the next cylinder at market rate."

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The advance will reduce people's financial burden when they purchase the LPG cylinder at the market price.

Having an Aadhaar number is an important prerequisite for availing this cash transfer scheme. So, people who don't have one have to get an Aadhaar number and link it to their bank accounts. This can be done by visiting their bank branch. Then, they have to also provide their Aadhaar number to their LPG distributor who will link it with their LPG consumer numbers.

Moily said the government, which ran up a subsidy bill of Rs. 40,000 crore on LPG cylinders last year, expects to cut its subsidy outgo by up to R10,000 crore annually once the scheme is rolled out across the country.

Refusing to share exact rollout timelines for the remaining states, Moily said the government intends to extend the scheme to the rest of the country with the next few months.

"We are ready to launch the direct benefit transfer scheme for LPG all over the country but we want to see the results of the rollout in these 20 districts," he said.

The 20 districts have been selected because they have a high Aadhaar or unique identification number penetration.

While as many as 89% of the LPG consuming population in these districts has Aadhaar numbers, the government will give a three-month grace period to them to procure the number and link it with their bank accounts where cash subsidy has to be transferred.

However, after three months, or, from September 1, only consumers having Aadhaar and banks accounts linked to them will get cash subsidy. The rest will have to buy LPG at the market price.

Published by HT Syndication with permission from Hindustan Times.