LPG subsidy transfer

It is a long haul ahead for the Direct Benefit Transfer for LPG scheme, aimed at giving “subsidy to the right beneficiary”.

Consumers queue up outside a gas agency in Coimbatore on December 9, 2014, to submit the requisite forms for the DBTL scheme.

WITH its “Direct Benefit Transfer for LPG” (DBTL) scheme, the government wants to target “subsidy to the right beneficiary” by curbing black marketeering and diversions and eliminating bogus connections. Will it be an easy task? Well, it depends on the 15.3 crore active customers, the network of 15,000-odd LPG dealers of Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), and the public sector banks, which transfer the subsidy to customers’ accounts.

The DBTL scheme, which was launched by the United Progressive Alliance government on June 1, 2013, covered 291 districts before it was discontinued in early 2014. Following a substantial review, the Bharatiya Janata Party-led government modified and relaunched it in 54 districts across Himachal Pradesh, Punjab, Goa, Madhya Pradesh, Kerala, Karnataka, Andhra Pradesh, Telangana, Maharashtra, Puducherry and Daman & Diu on November 15, 2014, in the first phase. The scheme will cover the rest of the country on January 1, 2015, with 622 more districts.

The concerns

Has it been a success so far? Yes, says a confident Ministry for Petroleum and Natural Gas, maintaining that there is always scope for improvement. Oil companies too agree, though with a cautious note, as seeding of customers’ bank accounts is still a concern.

Dealers, however, fear that it may get difficult in the long run if the government does not increase their commission. A dealer said the current rate of about Rs.44 a cylinder was not enough, and soon it would become difficult to hire delivery boys.

According to IOC, the biggest player, the scheme is running successfully in the States mentioned above. Up to December 22, 2014, a permanent advance of Rs.568 had been transferred to the account of each of the nearly 9.53 lakh consumers. A total subsidy amount of approximately Rs.205 crore was also transferred to Indane customers who are Cash Transfer Compliant (CTC).

Massive publicity

The revised scheme “PAHAL” is being widely publicised through advertisements in the media and hoardings across the country; promotions through the electronic media will follow shortly. Forms for linking of Aadhaar and seeding of bank accounts have been made available at the LPG distributors’ showrooms.

A special drive has also been undertaken to inform customers about the scheme through SMS/letters/personal interaction.

Currently, about 30 per cent of Indane LPG customers are CTC and efforts are being made to add more to the list.

Illegal connections

On black connections, a senior IOC executive said, “There is no term like ‘black connections’. However, connections found to be multiple on account of same name/same address are being detected and blocked. As on December 1, 2014, as many as 58.73 lakh multiple connections of IOC Indane gas have been blocked.”

In fact, as on December 30, 2014, around 17,714 customers had opted out of the subsidy scheme. These customers have availed themselves of the option given by the government for those who can afford to buy at market price, the official clarified.

While the government and oil companies say they are prepared to meet the challenges, they also acknowledge that it will be premature to make any tall claims on the scheme’s success.