The government is likely to launch a scheme next month to give new domestic LPG connection free of cost to families living below poverty line (BPL), the biggest pro-poor scheme of the UPA-II.
At present, a consumer has to shell out Rs 1,250 as security deposit for getting a new LPG connection and another Rs 150 for pressure regulator. This Rs 1,400 needed for getting a new connection will be subsidised by the government.
"About Rs 490 crore would provisioned in the Budget for subsidising new LPG connection for BPL families. We hope to get Cabinet approval (for the scheme) in coming weeks and are targeting launch of the scheme on Gandhi Jayanti on October 2," a top Oil Ministry official said.
A brainchild of Minister of State for Petroleum and Natural Gas Jitin Prasada, the LPG subsidy plan would be the biggest scheme for poor in the second stint of Congress-led UPA. All the previous big draws, including employment guarantee scheme and farm loan waiver were launched in UPA-I.
The official said free LPG connections would be given to 35 lakh BPL families every year.
The budgetary requirement for implementing the scheme works out to around Rs 490 crore.
The scheme would be operated through public sector oil marketing companies - Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp.
The official said oil ministry's Vision 2015 is to extend the usage of LPG for cooking purpose in rural/ under served areas so that standard of life in rural areas improves and kerosene/fire-wood is replaced by the clean fuel.
About 5.5 crore new LPG connections are proposed to be released till 2015 to reach 16 crore customers with most of the new connections being released in rural areas.
Of about 1 crore connections to be released each year, it is expected that number of BPL families will be on an average around 35 lakh every year.