29.12.15

Cutting LPG subsidy

Subsidised cooking gas will no longer be provided to buyers earning Rs.10 lakh or more a year, continuing a series of reforms including market-based diesel prices, direct transfer of LPG subsidy and revamped oilfield contracts that end bureaucratic meddling. The new system will begin in the new year and deny subsidy to such consumers even if the cooking gas connection is in the name of the spouse. The government move is somewhat similar to the practice of `means test' prevalent in some advanced economies like the US and UK, where an individual or a family is tested for its eligibility for government assistance and the ability to do without that, mainly for legal aid, welfare funds, students finance and medical aid.
In keeping with the approach of trusting the citizens, the rule will initially be implemented on self-declaration basis for cylinders booked from January 2016 onwards, it said. Currently, there are 16.35 crore cooking gas connections in the country. The government had earlier successfully implemented the PAHAL scheme, which transferred cooking gas subsidy directly to bank accounts of 14.78 crore customers to ensure that benefits go only to the target group.
The government had also given a call to well-to-do households for voluntarily giving up LPG subsidy. This encouraged 57.50 lakh consumers to opt out of LPG subsidy voluntarily.

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