MINISTER OF PETROLEUM & NATURAL GAS ( Dr. M. VEERAPPA MOILY)
(a) to (e) : A statement is laid on the Table of the House.
STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF THE LOK SABHA STARRED QUESTION NO. 121
BY SHRI M. KRISHNASSWAMY AND SHRI NAVEEN JINDAL TO BE ANSWERED ON 13TH DECEMBER, 2013 REGARDING
CASH SUBSIDY ON LPG AND KEROSENE
(a) to (c): A pilot project based on Aadhaar authenticated LPG cylinder delivery was conducted
in Mysore for three distributors of Indian Oil Corporation Limited (IOC), Hindustan Petroleum
Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) during September
2011. A scheme of direct benefit transfer to LPG consumer (DBTL) was then formulated which took
into account the learnings from the pilot project. The scheme was initially launched in 18 high
Aadhaar coverage districts on 1.6.13. As per the approved expansion, DBTL scheme has been
expanded to 184 districts covering 6.57 crore LPG consumers. The scheme will cover 291 districts
of the country by 1.1.14 covering a total of 9.22 crore LPG consumers.
Under the DBTL scheme all domestic LPG cylinders (up to and beyond the cap) will be sold to
domestic LPG consumers who have linked their Aadhaar number to their LPG consumer number and
to their bank account at market price. The difference between market price and subsidized retail
selling price (excluding VAT) applicable on the date of delivery is automatically transferred to
the consumer’ Aadhaar linked bank account. One time Permanent Advance is also provided to each
consumer at the time of joining the DBTL scheme for purchase of first cylinder. Consumers who
have not linked their Aadhaar number to their LPG and bank database are allowed 3 months grace
period from the date of launch of DBTL to seed their Aadhaar number in LPG and Bank database
and join the scheme. They continue to receive their entitlement of LPG cylinders at Subsidized
Retail Selling Price during the grace period.
After the expiry of the grace period of 3 months, all LPG consumers will receive cylinders at
Market Price and become entitled to subsidy/ Permanent advance on joining the scheme.
A Pilot Project for ‘Direct Transfer of Cash Subsidy of PDS Kerosene’ was launched in the Block
Kotkasim, District Alwar (Rajasthan) in December 2011 by MOP & NG, in collaboration with
Government of Rajasthan. As per the report of the State Government of Rajasthan there has been
a marked decline in consumption of Kerosene and consumption has reduced by almost 60% of the
allocation. Subsidy is transferred into the Bank account of PDS SKO beneficiaries.
The scheme for Direct Cash Transfer of Cash Subsidy on PDS Kerosene, 2012 was then finalised in
consultation with Ministry of Finance and same was notified by MoP&NG on 11.10.2012. Eleven
states / UTs indicated their willingness to join the scheme and three states have so far
indicated the specific districts where the scheme would be implemented during 2013-14.
(d) and (e) : Under the DBTL scheme, subsidy is given at par to all consumers during the three
months grace period, regardless of whether their Aadhaar cards are linked to Bank accounts or
not. Thereafter, all LPG consumers receive LPG cylinders at market price and become entitled to
subsidy on joining the scheme. Additional VAT burden on market price of LPG cylinder is borne
by LPG consumers. State Governments have been requested to make VAT on LPG specific and not ad
valorem so that VAT burden remains the same for DBTL and non-DBTL consumers.
