Over Rs 21,000 crore saved by blocking 3.34 fake LPG connections: Govt tells CAG

Ministry of Petroleum & Natural Gas on Tuesday said that under the Modi government-led scheme PAHAL (Pratyaksh Hastantrit Labh Yojana), it has managed to block 3.34 crore duplicate/ fake/ inactive domestic LPG connections. This has helped the government save Rs 21,261 crore in FY15 - FY16.

The Ministry released the numbers after the Comptroller and Auditor General of India (CAG), in a report, stated that the government had failed to save as much money as claimed.

It said, “MoPNG assumed that the inactive or blocked consumers, who were not eligible for subsidy would have availed the entire quota of 12 cylinders against the national average per capita consumption of 6.27 cylinders in 2014-15. Considering the national average off take of 6.27 cylinders (as used by OMCs in their estimation), the estimated savings in subsidy for the year 2015-16 would be Rs 4,813 crore only.”

The Ministry said, it carried out an intensive exercise for identifying duplicate/ fake/ ghost/ inactive domestic LPG connections and, as of April 1, 2015, 3.34 crore such connections were identified by the Oil Marketing Companies (OMCs). 

On November 2014, the BJP government introduced PAHAL scheme, for the transfer of subsidy on LPG directly to the consumers, linking their aadhaar card number, bank account, and LPG consumer id.

The Ministry said that the total consumption of cooking gas in any given year was 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.

"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", the Ministry added.

On August 12, CAG had presented a report in the Parliament where it said that "the methodologies adopted by the Ministry and the OMCs were different. In both estimations, however, the Audit noticed inherent inconsistencies which would lower the estimated savings.” 

The Ministry claimed that if PAHAL was not implemented, the subsidy burden would have been higher than the actual expenditure even with lower petroleum prices. 

ZeeBiz had earlier reported, the government had said, in February this year, that the potential savings in LPG subsidy for 2015-16 was Rs 9,211 crore. OMCs estimated the savings for the same period at Rs 5,107.48 crore.