Govt. suspended LPG subsidy transfer scheme and hiked cylinder quota

February 3, 2014

The Cabinet Committee on Economic Affairs (CCEA) increased the quota of subsidized domestic LPG cylinders to 12 from 9 annually per household.

The Union Government also suspended the direct transfer of LPG subsidy into the consumers’ bank accounts linked to Aadhaar unique identity numbers. Thus, consumers will continue to pay only the subsidized price to their LPG distributors and in turn the public sector oil marketing company will get the subsidy from the Government.
The increased subsidy cap will be effective from February 1. Though, for the current fiscal (2013-14) the total number of subsidized cylinders available for each household will be restricted to 11, as there are only two more months left.
The increase in cap of cylinders will mean that LPG (Liquified Petroleum Gas) will be available at a subsidized rate for 97 % of its total consumer base of 140 million.
The increases quoto will add another Rs 5,000 crore to the burgeoning subsidy burden on petroleum products, expected to be Rs 141,000 crore this financial year.

Note: In September 2013, the Supreme Court ruled that that Aadhaar cards or Unique Identification number (UID) could not be made mandatory for people to get services or benefits under Government schemes viz. LPG subsidy, transfer benefits, food security, vehicle registration, scholarships, marriage registration, salaries and provident fund, etc, and nobody should be deprived of any such facilities for want of the card. It also rejected the review petition filed by the government on this issue.

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