LPG Subsidy Savings A Fraction Of What Modi Has Been Claiming: Report

CAG report reveals "substantial systemic problems"

20/07/2016 1:44 PM IST | Updated 20/07/2016 1:52 PM IST
Anindito Mukherjee / Reuters

A CAG report to be tabled in Parliament shortly, will seriously throw into question the Narendra Modi government's claims that it will save about ₹22,000 crores in the financial years 2014-15 and 2015-16 through its "GiveItUp" cooking gas subsidy campaign, the Hindu reported.

According to the CAG audit, the total savings from people voluntarily giving up LPG subsidy, as well as any direct bank transfers under the scheme amount to less than ₹2,000 crores, far less than what the government has been claiming, said the report.

The audit also reveals "substantial systemic problems" with the government's Direct Benefit Transfer in LPG scheme that includes such issues as the domestic subsidies being diverted to commercial use and commercial LPG toward domestic use, the report added.

The Hindu cited sources, saying the huge drop in subsidy budget is, in fact, because of the ongoing low global prices of LPG imports, and not the program itself.

The government introduced direct bank transfers as part of its DBTL scheme launched in 2014, which includes transferring the cooking gas subsidy directly into citizens' bank accounts, and asking high-income earners to voluntarily surrender their subsidies.

The LPG subsidy scheme has been a big part of the Modi's economic agenda to reduce the overall reliance on subsidies.

Petroleum Minister Dharmendra Pradhan recently said the government would have had to spend around ₹15,000 crore more in 2014-15 in the absence of the DBTL scheme.

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