Attention of the Ministry of Petroleum
and Natural Gas has been drawn to the news item appearing in the newspaper ‘The
Hindu’ today (20th July) under the caption “CAG audit nails Centre’s
claim on LPG subsidy saving”.
In this regard, it is clarified that an
intensive exercise was carried out for identifying
duplicate/fake/ghost/inactive domestic LPG connections and, as of 01.04.2015,
3.34 Crore such connections were identified by the Oil Marketing Companies
(OMCs). As a result of implementation of DBTL (PAHAL) mechanism, it became
possible to block these 3.34 Crore LPG connections as the subsidy was
transferred in the accounts of only those consumers who had registered under
PAHAL and who have been cleared after de-duplication exercise. Before DBTL, all
or many of these 3.34 crore consumers would have continued to purchase
subsidized cylinders from the distributors. But for the blocking of these
accounts, the subsidy bill would have been much higher despite fall in crude
oil prices.
Estimated Savings from the above
efforts are calculated as follows:
For the financial year (FY) 2014-15, for 3.34 crore consumers
outside the PAHAL net, the Estimated savings would be 3.34 crore x 12 cylinders
x Rs.369.72 (average Subsidy/cylinder for FY 2014-15) equal to Rs.14,818.4 crore.
Following a similar principle, the Savings estimated for FY 2015-16 is Rs.6,443
crore and the total for both the years works out to Rs. 21,261 crores.
FINANCIAL YEAR
|
Average Subsidy per
Cylinder (for that year)
|
CALCULATIONS
|
Estimated Savings (in
crores of rupees)
|
2014-15
|
Rs. 369.72
|
3.34 * 369.72 * 12
|
14,818.4
|
2015-16
|
Rs. 150.82
|
3.56 * 150.82 * 12
|
6,443
|
TOTAL
|
21,261.4
|
The total consumption of cooking gas in
any given year is a combination of the number of connections at the beginning
of the year, bogus connections eliminated during the year through the process
of DBT under PAHAL, new connections issued to genuine consumers during the year
and normal fluctuations in individual consumption. Hence, the saving from
implementation of DBT cannot be correctly computed merely by reference to the
total consumption in a year or the total expenditure on subsidy. If the DBT had
not been implemented, the outgo on the subsidy would have been higher by Rs.
14,818 crore in 2014-15 and Rs. 6,443 crore in 2015-16. Hence the total savings
from the elimination of fake/duplicate/ghost connection as a result of
implementation of DBT for the two years together, as calculated above, is estimated
at more than Rs. 21,000 crore. This figure is not comparable with the actual
expenditure on subsidy which includes the subsidy on new genuine connections
given during these two years. Without implementation of PAHAL, subsidy burden
would have been higher than the actual expenditure recorded during these years,
even with lower petroleum prices.
Furthermore, it should be noted that
concrete evidence of successful elimination of bogus connections is seen in the
phenomenal growth of non-subsidized commercial LPG sales which have registered
an increase of 39.3% in the period April 2015 to March 2016. This is in
contrast to the pre-PAHAL experience when commercial sales growth was negligible
or declining.
*****
YKB/Rk