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Monday, January 4, 2016

no LPG gas subsidy to consumers earning Rs.10 lakhs and more

Life on a rear-view mirror :  about 4 decades ago, there were less than a handful of houses which had the red roller – cooking was done by kerosene stoves and kerosene was the most sought after commodity.  Recall those two-wheeled barrel vehicles selling ‘krishnoil’ !. Housewives were afraid of pressure cookers too..then came the revolutionary LPG stove and gas cylinder -  jokesgalored of wives forgetting the close the gas stoves, coming to see movies and calling back their nearby homes [those days only very few houses had telephone connection !]  to check whether they have switched the stove off – remember that there would be slides in Cinema theatres urging the people to ensure that they switch off the gas stoves immediately once the cooking is over…..

The red cylinder containing LPG is a prized possession for households and there is always concern as to how many days the connection would last and whether refill would be readily available. LPG for domestic cooking purposes is available in 14.2Kg capacity cylinders with authorized LPG distributors of IOCL.   Even in these days of  double cylinders and multiple connection, people of worried of regular supply.  The distributor is a very important person and the arrival of gas delivery boy is heralded with happiness.  Do you know the rate of a gas cylinder ?????? :

The gas subsidy was the much talked subject for decades. Use of LPG in India by customers is governed by LPG (Regulation of Supplies and Distribution) order. Each distributor has a specified area of operation and customers can avail the cylinders only if they are residing within the area of operation of a distributor.   Liquefied petroleum gas, also called LPG, GPL, LP Gas, liquid petroleum gas or simply propane or butane, is a flammable mixture of hydrocarbon gases used as a fuel in heating appliances and vehicles.

For long there have been apprehensions and oft-repeated complaints about the ‘gas cylinder meant for domestic use’ wrongly [illegally] diverted to commercial establishments [read hotels]. People feared that this could result in them getting an used cylinder or their quota being unscrupulously used by somebody else.  In a swift move, PM Shri Narendra Modi changed that.

 In Sept. 2012, the Government  announced restriction of the supply of subsidised cooking gas to 6 cylinders per household in a year to fetch an additional Rs 20,300 crore.  The CCPA decided that each household will get 6 cylinders of 14.2-kg per annum at the subsidised rate of Rs 399 and any requirement beyond that would have to be procured at the market rate of Rs 746 per bottle.   Modiji went a step ahead – linked Bank Account with Gas account and Aadhar – whilst critics were busy commenting that this would never become a reality – now in a few months, people have forgotten that they were getting gas cylinders at a lower rate. Now they pay in full, and the subsidy, gets credited to their Bank Account, eliminating most mischieves in gas cylinder distribution.

Now comes another move – the Oil Ministry recently announced that subsidised cooking gas will no longer be provided to consumers earning Rs 10 lakh or more a year.  It is stated that the new system will begin in the new year and deny subsidy to such consumers even if the cooking gas connection is in the name of the spouse, the ministry said. In keeping with the approach of trusting the citizens, the rule will initially be implemented on self-declaration basis for cylinders booked from January 2016 onwards, it said.

Indian Express report reads that currently, there are 16.35 crore cooking gas connections in the country. The government had earlier successfully implemented the PAHAL scheme, which transferred cooking gas subsidy directly to bank accounts of 14.78 crore customers to ensure that benefits go only to the target group. The government had also given a call to well-to-do households for voluntarily giving up LPG subsidy. This encouraged 57.50 lakh consumers to opt out of LPG subsidy voluntarily ~ yours Truly is one among them. 

At present, all households are entitled to 12 cylinders of 14.2-kg each at subsidised rate of Rs 419.26, while the market price of each cylinder is Rs 608. In the assessment year 2014-15, a total of 20.26 lakh assesses were reported as having a taxable income above Rs 10 lakh, according to the Central Board of Direct Taxes data. Justifying the latest move, a statement issued by the Union Petroleum Ministry said “the government has decided that the benefit of the LPG subsidy will not be available for LPG consumers if the consumer or his/her spouse had taxable income of more than Rs 10 lakh during the previous financial year computed as per the Income Tax Act, 1961.”

For the uninformed, the prevailing  price of LPG cylinder in Chennai is Rs.622.25.


With regards – S. Sampathkumar                                                                    4th Jan 2016

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