Economy

Cash transfer benefit: double bonanza on first LPG booking

RICHA MISHRA SHISHIR SINHA New Delhi | Updated on November 27, 2017

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Customers will get both fixed subsidy and reimbursement in bank on first cylinder

It will be a double bonanza for domestic LPG customers going in for the direct benefit transfer scheme. For such customers will end up with a cash advance of ₹568 a cylinder for the first booking.

Here’s how this will happen. “On the first booking under the scheme, a customer will get a fixed subsidy of ₹568 a cylinder. Actual subsidy will also be transferred into the customer’s bank account on the date of delivery. So, in effect, the customer will get the cash benefit twice for the first booking under the scheme,” a senior Petroleum & Natural Gas Ministry official said.

However, from the second booking onward, a customer will only get cash benefit of actual subsidy, while they can retain the earlier fixed subsidy amount (₹568/cylinder).

Fixed subsidy

“The fixed subsidy can also be termed as a security deposit, so that at no point is a customer denied a cylinder,” the official told BusinessLine. For customers already enjoying the DBTL benefit before it was wound up last year, the fixed subsidy limit will remain ₹435 a cylinder. The fixed subsidy amount has been worked out based on an average subsidy rate of ₹40 a kg.

At present, subsidised domestic LPG in Delhi is sold at ₹417 a cylinder, while the same in Mumbai is sold at ₹452 a cylinder. The prices change due to the value-added tax component. The prevailing market rates of domestic LPG range between ₹865 and ₹905 a cylinder. DBT on LPG is estimated to save ₹12,000-₹14,000 crore for the Government on subsidy outgo.

When the scheme was wound up, it was operational in 291 districts across the country.

On October 18, the Government re-launched the scheme, which was rolled out, with modifications, from November 15 in 54 districts, covering a customer base of 2.33 crore. Of this, 72.50 per cent, or 1.69 crore people, are ready to receive cash transfers.

Expansion plan

The Government proposes to expand the scheme to rest of the country from January 1, 2015. LPG dealers, too, do not foresee any hiccups in implementation as the scheme has been tried and tested.

Published on November 18, 2014

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