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HindustanTimes Wed,27 Aug 2014

Squabbling in UPA over hiking subsidised LPG cap

Saubhadra Chatterji, Hindustan Times  New Delhi, January 03, 2013
First Published: 23:49 IST(3/1/2013) | Last Updated: 02:03 IST(4/1/2013)

The UPA government is trying to resolve an internal tussle over increasing the number of subsidised LPG cylinders from six to nine for each household every year.

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Even as ministries concerning petroleum and food strongly favour hiking the number of low-priced cooking gas cylinders to at least nine, from the cap of six imposed last September, the finance ministry and sections of the Prime Minister's Office seem to have reservations about footing the bill for additional fuel subsidies.

Top UPA sources maintained that the finance ministry has strongly argued against any further increase in the number of subsidised cylinders, taking into consideration studies which show that around 47.5% LPG-consuming households don't use more than six cylinders annually.

"The subsidy cap is well-planned as it takes care of sections that need the subsidy more than others. If there is an increase in subsidised cylinders, they may well find their way into the black market," said an official. http://www.hindustantimes.com/Images/Popup/2013/1/04_01_pg11a.jpg

While ministers such as KV Thomas have already met party president Sonia Gandhi to seek an increase in LPG subsidy, allies like DMK and NCP have favoured more low-priced cylinders.

In the UPA co-ordination meeting, NCP chief Sharad Pawar and DMK leader TR Baalu had argued against the government forcing "more expenditure on the aam aadmi's kitchen at this time of high inflation".

A few days before the Gujarat assembly polls, petroleum minister M Veerappa Moily had announced that a decision to increase LPG subsidy was in the offing.

Two cabinet meetings have taken place after the polling, but the much-awaited cabinet committee on political affairs is yet to be called.

In Maharashtra, there are 1.71 crore LPG connections and the state government gives Rs. 370 subsidy per cylinder - to a ceiling of nine.

While a section of the Congress pointed out that this model covered 90% of the consumers, a section of officials maintained that a large part of this subsidy goes to the affluent class and, thus, can be avoided.

Top sources also suggested that the centre is mulling a proposal to further increase diesel prices, and then hike the LPG subsidy cap to achieve a balance.


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