Fuel subsidy: Govt to give Rs 400 to BPL families

As part of India’s first direct cash transfer scheme, every below poverty line family may get over Rs 400 per month from the government from April next year in lieu of fuel subsidy for kerosene and liquefied petroleum gas cylinders.

Updated on: May 28, 2011, 02:08:51 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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As part of India’s first direct cash transfer scheme, every below poverty line family may get over Rs 400 per month from the government from April next year in lieu of fuel subsidy for kerosene and liquefied petroleum gas cylinders.

The move, which is expected to be considered by the Empowered Group of Ministers (EGoM) on June 9, is aimed at checking use of kerosene for fuel adulteration and reduce financial loss to fuel companies.

New methodology, if accepted, will benefit around 40 crore poor Indians.

The smart card
Once the new regime is introduced, a below poverty line (BPL) family will get approximately Rs 300 per month on a smart card to be registered in name of a household woman for kerosene and another Rs 100 for LPG cylinder.
“These smart cards will have Aadhaar numbers to prevent any leakages,” as official said.
Kerosene and LPG cylinders will be available at the market rate and the poor will get it at the existing subsidised price after the money will be deducted from their smart card.

The work for introducing the regime has already started in states such as Haryana and Andhra Pradesh.

Lessening burden
The fuel subsidy burden on the Centre in 2010-11 was Rs 38,336 crore in the last financial year, of which about R16,000 crore was meant for providing kerosene at subsidised rates to the poor. In this budget, the total petroleum subsidy is Rs 23,640 crore.

Till now, the government had to bear a cost of Rs 28 per litre to provide kerosene at highly subsidised rate of Rs 12 per litre and over Rs 150 for a LPG cylinder.

The low cost meant incentive to sell kerosene for adulteration of petrol, whose market price is Rs 63 per litre.
“As the product will move in the entire distribution chain at full price, there will be no incentive left for diversion of kerosene,” says a proposal mooted for empowered group of ministers (EGoM) headed by Pranab Mukerjee.
The government intends to introduce the new regime from April 2012.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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