After initial hiccups, the government on Friday decided to transfer cash subsidy to domestic cooking gas (LPG) consumers under its ambitious Direct Benefit Transfer (DBT) scheme from next month.
LPG consumers will get about Rs. 4,000 per annum in cash from the government, and they will have to then buy LPG at market price of Rs. 901.50 per 14.2-kg cylinder.
Currently, each consumer is entitled to get 9 cylinders of 14.2-kg each at subsidised price of Rs. 410.50. On each of these cylinder government bears a subsidy Rs. 435.
Beginning next month, consumers in select districts will get this subsidy amount transfered into their bank accounts.
Once they get the subsidy, they will have to buy LPG at market price.
The decision to roll out the DBT on LPG cylinders in a phased manner was taken at a high powered meeting headed by Prime Minister Manmohan Singh.
"There will be a phased roll out beginning with one district and expanding to 20 districts by May 15, 2013. Roll out will cover more districts as Aadhaar enrolment expands," said an official release, adding that the oil ministry is working on roll out of the scheme.
There are about 14 crore LPG consumers in the country.
The government has already capped the number of subsidised cylinders at six per household per year and beyond that a consumer has to pay the market price. However, some of the state governments are providing more subsidised cylinders and bearing the burden themselves.
"The subsidy amount will be transferred to consumers directly into their bank accounts. With the subsidy going directly, there will be only one price at which cylinders will be sold at a dealer's shop," the release said.
DBT, it added, will eliminate all ghost connections and diversion of cylinders.