The Central government should consider involving agriculture cooperative societies, post offices and cooperative banks in disbursing cash subsidies directly to cooking gas users, according to the Tamil Nadu government.

The Centre should also ensure the subsidy element is kept flexible to cover increasing cost of LPG.

The Chief Minister O Panneerselvam, in a letter to the Prime Minister Narendra Modi, said the State government is concerned about the availability of adequate banking facilities in remote areas and consumer access to nationalised banks for consumers to easily access the subsidy under the Modified Direct Benefit Transfer to LPG consumers.

The cash transfer which has been launched from November 15 in 54 districts across the country will be rolled out in Tamil Nadu from January 1, 2015.

The Chief Minister said, in remote areas the Primary Agricultural Cooperative Societies and Post Offices can also be involved in delivering the subsidy. Urban Co-operative Banks used where needed.

He also suggested the total subsidy should not be fixed but increased in line with LPG price increases.

Panneerselvam reiterated the State government’s stand against transferring subsidy as cash under the Public Distribution System including kerosene and fertilisers where timely delivery of commodities is as critical as the quantum of subsidy.

Also, “on grounds of sound administrative practice and to ensure that the States are true partners in development” the Central government should release the subsidy to the states which should handle the direct transfer of cash to beneficiaries’ bank accounts.

Tamil Nadu would have preferred this for LPG also. But with Centre bearing the entire subsidy and the gas distribution by public sector Oil Marketing Companies it is an issue of the Centre’s administrative competence and jurisdiction. (EOM)

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