Govt defends Rs 21,000 crore LPG savings through DBTL scheme

The government on Wednesday defended itself on the savings of over Rs 21,000 crore through the Direct Benefit Transfer of LPG (DBTL) scheme (also known as PAHAL) after a report claimed that the savings through this route were in fact less than Rs 2,000.

The Ministry of Petroleum and Natural Gas clarified that an intensive exercise carried out by Oil Marketing Companies (OMCs) revealed 3.34 crore duplicate, fake, ghost or inactive domestic LPG connections as of April 1, 2015. These 3.34 crore connections were then blocked. “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 Ministry explained.

According to a report by The Hindu on Wednesday said that a CAG report to be tabled in the Parliament during the monsoon session had found out that savings from people voluntarily giving up their LPG subsidy and DBT is less than Rs 2,000 crore.

The report further said that the rest of the savings was in fact through the large fall in prices of LPG that India had imported. The value of LPG imports dropped from Rs 36,571 crore in 2014-15 to a projected Rs 25,626 crore in 2015-16, a Petroleum Planning and Analysis Cell (PPAC) report of the government said. A saving of Rs 10,945 crore in a year.

The Ministry however stuck to its defence saying, “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.”

The Ministry further said that it should be noted that concrete evidence of successful elimination of bogus connections is seen in the phenomenal growth of non-subsidised 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.