Attention of the Ministry of Petroleum and Natural Gas has been drawn to the news item appearing in the newspaper ‘The Hindu’ today (20^th July) under the caption “CAG audit nails Centre’s claim on LPG subsidy saving”.

In this regard, it is clarified that an intensive exercise was carried out for identifying duplicate/fake/ghost/inactive domestic LPG connections and, as of 01.04.2015, 3.34 Crore such connections were identified by the Oil Marketing Companies (OMCs). As a result of implementation of DBTL (PAHAL) mechanism, it became possible to block these 3.34 Crore LPG connections as the subsidy was transferred in the accounts of only those consumers who had registered under PAHAL and who have been cleared after de-duplication exercise. Before DBTL, all or many of these 3.34 crore consumers would have continued to purchase subsidized cylinders from the distributors. But for the blocking of these accounts, the subsidy bill would have been much higher despite fall in crude oil prices.

Estimated Savings from the above efforts are calculated as follows:

For the financial year (FY) 2014-15, for 3.34 crore consumers outside the PAHAL net, the Estimated savings would be 3.34 crore x 12 cylinders x Rs.369.72 (average Subsidy/cylinder for FY 2014-15) equal to  Rs.14,818.4 crore. Following a similar principle, the Savings estimated for FY 2015-16 is Rs.6,443 crore and the total for both the years works out to Rs. 21,261 crores.

The total consumption of cooking gas in any given year is a combination of the number of connections at the beginning of the year, bogus connections eliminated during the year through the process of DBT under PAHAL, new connections issued to genuine consumers during the year and normal fluctuations in individual consumption. Hence, the saving from implementation of DBT cannot be correctly computed merely by reference to the total consumption in a year or the total expenditure on subsidy. If the DBT had not been implemented, the outgo on the subsidy would have been higher by Rs. 14,818 crore in 2014-15 and Rs. 6,443 crore in 2015-16. Hence the total savings from the elimination of fake/duplicate/ghost connection as a result of implementation of DBT for the two years together, as calculated above, is estimated at more than Rs. 21,000 crore. This figure is not comparable with the actual expenditure on subsidy which includes the subsidy on new genuine connections given during these two years. Without implementation of PAHAL, subsidy burden would have been higher than the actual expenditure recorded during these years, even with lower petroleum prices.

Furthermore, it should be noted that concrete evidence of successful elimination of bogus connections is seen in the phenomenal growth of non-subsidized commercial LPG sales which have registered an increase of 39.3% in the period April 2015 to March 2016. This is in contrast to the pre-PAHAL experience when commercial sales growth was negligible or declining.

Finance Minister expresses gratitude and appreciation for those households who voluntarily gave up cooking gas subsidy  

National Scheduled Caste and Scheduled Tribe Hub to be set-up to provide support to SC/ST entrepreneurs Stand Up India Scheme to benefit 2.5 lakh SC/ST and Women entrepreneurs

The Union Budget for the Financial Year 2016-17 contains several new measures for the Social Sector. Highlighting these measures in his Budget Speech in the Parliament here today, the Minister for Finance and Corporate Affairs and Information and Broadcasitng, Shri Arun Jaitley said that the Government has “decided to embark on a massive mission to provide LPG connection in the name of women members of poor households”. A sum of Rs.2,000 crore has been set aside in this year’s Budget to meet the initial cost of providing these LPG connections, the Finance Minister explained.

The Finance Minister Shri Jaitley said this will benefit about 1.5 Crore households below the poverty line in 2016-17. The scheme will be continued for at least two more years to cover a total of 5 crore BPL households. This will ensure universal coverage of cooking gas in the country, the Minister added. This measure will empower women and protect their health. It will reduce drudgery and the time spent on cooking. It will also provide employment for rural youth in the supply chain of cooking gas, he said.

The Finance Minister expressed his gratitude and appreciation for the 75 lakh middle class and lower middle class households who have voluntarily given-up their cooking gas subsidy, in response to the call given by the Hon’ble Prime Minister, Shri Narendra Modi.           In an another important announcement, Shri Arun Jaitley said that it is proposed to constitute a National Scheduled Caste and Scheduled Tribe Hub in the MSME Ministry in partnership with industry associations. This Hub will provide professional support to Scheduled Caste and Scheduled Tribe entrepreneurs to fulfil the obligations under the Central Government Procurement Policy 2012, adopt global best practices and leverage the Stand Up India initiative.

The Finance Minster also announced the approval given by the Union Cabinet to the “Stand Up India Scheme” to promote entrepreneurship among SC/ST and women. Rs.500 Crore has been provided for this purpose. The Scheme will facilitate at least two such projects per bank branch, one for each category of entrepreneur. This will benefit at least 2.5 lakh entrepreneurs, the Minister elaborated. (pg10/para56)

Shri Jaitley said the schemes for welfare and skill development for Minorities such as Multi-Sectoral Development Programme and USTAAD shall be implemented effectively.

Source Ministry of Finance 29-February, 2016 1