Direct cash transfer cancels 3.3 crore fake LPG connections

New Delhi: Oil minister Dharmendra Pradhan said on Tuesday that around 3.3 crores fake LPG connections have been blocked after Direct Benefit Transfer leading to saving of  Rs 21,000 crore in subsidies.

“When we assumed office (in 2014), we had a system of misdirected subsidies, rich and upper middle class were entitled to LPG subsidies. There were many duplicate connections and the subsidised LPG was diverted to commercial and industrial segments,” said the minister.

He alleged that as a  result poorest of the poor never had access to LPG. In 2014, almost half of Indian households didn’t have LPG connections.

Mr Pradhan said the Direct Benefit Transfer of LPG was launched in 2014 wherein subsidy was directly paid into the bank accounts of the beneficiaries. “This made the process transparent and plugged the subsidy leakages which was otherwise being misused through ghost accounts,” he said.

The minister said that the scheme is benefiting over 176 million consumers and over Rs 40,000 crore or $6.5 billion of subsidy has been transferred directly to the beneficiaries bank accounts in the last two years.

“It has also resulted in estimated saving of over Rs 21,000 crore or $3.2 billion in two years to the government,” he said.

The minister informed that an intensive exercise was also carried out for identifying duplicate, fake, ghost and inactive domestic LPG connections.

As on April 1, 2015, 33.4 million connections were identified and blocked, saving Rs 21,000 crore subsidy in 2014-15 and 2015-16.

Also, it has led to sale of commercial LPG, which is based on market price, rising by 39.5 per cent during 2015-16 in contrast to pre-DBT when these sales were not growing at all, he said, adding this was clear evidence that the subsidised residential supply was earlier diverted to commercial. The minister said 12 million have voluntarily given up subsidies to provide underprivileged access to LPG.