‘Cash subsidy to LPG consumers has stopped leakages’

Prime Minister Narendra Modi on Sunday said the landmark scheme to give LPG consumers cash subsidy instead of selling to them below market priced cooking gas has stopped leakages, saving thousands of crores of rupees.

The use of technology has helped transfer of cash subsidy to the actual users of the cooking fuel, he said at a Nasscom event.

"My estimate is that at least 10 per cent of the leakages has been stopped, saving thousands of crore of rupees," he said.

From January 1, all LPG consumers in the country are entitled to get cash subsidy in their bank accounts which they can use to buy a cooking gas refill at market price.

Previously, government gave subsidy to oil companies who sold LPG at subsidised rates to consumers. Since the LPG meant for households cost much less than the market price refill that commercial establishments like hotels and restaurants are to use, there were diversions and blackmarketing.

The Direct Benefit Transfer Scheme for LPG subsidy, now renamed PaHaL or Pratyaksha Hastaantarit Laabh, now covers 75 per cent of the 15.3 crore LPG consumers in the country and is the world's largest cash transfer programme as compared to similar programmes in other countries such as China, Mexico and Brazil.

Under PaHaL, LPG cylinders are sold at market rates and consumers are entitled to get the subsidy directly into their bank accounts. This is done either through an Aadhaar linkage or a bank account linkage.

PaHaL aims to reduce diversion and eliminate duplicate or bogus LPG connections.