The Cabinet on Thursday approved raising the quota of subsidised LPG to 12 cylinders annually from nine and put on hold linking the Aadhaar platform to the subsidy scheme.
The government had on January 17 said the limit would be raised, minutes after Congress vice-president Rahul Gandhi’s public demand to Prime Minister Manmohan Singh at an All India Congress Committee meet.
Announcing the decision taken by the Cabinet Committee on Political Affairs, oil minister M Veerappa Moily said raising the LPG quota will cost Rs. 5,000 crore in additional subsidy annually.
“In addition to the nine subsidised cylinders, people will get one cylinder each in February and March. Beginning April 1, people will get 12 cylinders per year at the rate of one cylinder per month,” oil minister Veerappa Moily said at a press conference after the Cabinet meet.
Read: RBI guv Rajan questions LPG cap hike
Moily also said the direct benefit transfer for LPG (DBTL) scheme, where consumers in as many as get 289 districts in 18 states got the subsidy amount in their bank accounts so that they could buy cooking gas at market rate, has been put on hold.
Explaining the reasons behind the move to put on hold a scheme that was dubbed 'game-changer, he said there were complaints about implementation of the scheme and a committee has been formed to look into them.
"Pending the committee examining the issues, the Aadhaar-linked LPG subsidy transfer has been put on hold," he said.
DBTL, under which consumers got Rs. 435 advance money in their bank accounts so as to help them buy a LPG cylinder at market price, was this month extended to 105 districts including Delhi and Mumbai.
“Pradhan mantriji, nine cylinders aren’t sufficient. The Congress needs 12 cylinders. The women of India need 12 cylinders,” Gandhi had said to loud applause at the AICC session.
The demand to increase LPG subsidy had been gathering momentum within the Congress in the past few weeks, with Gandhi meeting the PM and Congress MPs including Sanjay Nirupam, PC Chacko and Sandeep Dikshit lobbying for it with oil minister Veerappa Moily. They believe the move will go down well with voters in an important election year.
The cap on cheap domestic LPG cylinders came into effect in 2012 with the UPA first deciding on an annual quota of six and later raising it to nine under political pressure.
Read: Rahul Gandhi meets Manmohan over raising LPG cap
Moily had recently stated that 89.2% of the 15 crore LPG consumers use up to nine cylinders in a year and only 10% have to buy the additional requirement at the market price. If the quota is raised to 12, about 97% of the LPG consumers would be covered by subsidised LPG, he had said.
Consumers who have currently exhausted their quota have to buy LPG at the market price of Rs. 1,258 per cylinder. Subsidised LPG costs Rs. 414 per 14.2kg cylinder in Delhi.
Read: RBI guv Raghuram Rajan questions LPG cap hike
(With PTI inputs)