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LATEST NEWS UPDATES | Government looking at stripping the rich of LPG subsidy -Surojit Gupta & Sanjay Dutta

Government looking at stripping the rich of LPG subsidy -Surojit Gupta & Sanjay Dutta

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published Published on Nov 7, 2015   modified Modified on Nov 7, 2015
-The Times of India

NEW DELHI: The government is looking at taking rich households out of LPG subsidy scheme with the aim of freeing up resources to provide clean kitchen fuel to more poor families and ensure socially responsible use of public money.

While no final decision has been taken yet, the issue has certainly emerged as a discussion point within the top levels of the government.

"I humbly submit that the time has come for the government, the finance ministry can determine, that people in a particular income bracket should not be given the subsidy," oil minister Dharmendra Pradhan said at a panel discussion during the Delhi Economics Conclave, organized by the finance ministry.

"The question as to who should get subsidy should be debated. Subsidy should not be given to people in a particular income bracket," Pradhan said.

The oil minister was reacting to a question from FM Arun Jaitley, who asked whether one could move beyond the Jan Dhan-Aadhaar-Mobile (JAM) programme aimed at better targeting of subsidies and compulsorily deny the subsidy to people within a particular income bracket.

Pradhan said so far, nearly 42.50 lakh people had heeded the appeal of the prime minister and the FM's call and had given up their cooking gas subsidy. The government has been able to add 25 lakh new customers through this effort.

This is not the first time that the government of the day has talked about taking economically well off out of the subsidy net.

"The next important decision India will have to take is whether people like me... (are) entitled to get our LPG (liquefied cooking gas) subsidy," Jaitley had told a media event in November.

"I think the sooner we are able to take these decisions as to who is entitled to these subsidies -- of course some people would be -- the better it would be for our system. These decisions are all on our agenda," he had said.

The oil ministry under S Jaipal Reddy during the UPA-2 regime had drawn up a similar proposal as part of the overall plan to prune cooking gas subsidy, first reported by TOI on July 9, 2011.

The proposal was dumped almost as soon as it was put on paper due to stiff opposition from within the Congress and alliance partners. It had suggested asking anyone who owned a car, two-wheeler or a house; or figured in the income tax list to pay market price for cooking gas.

The government subsidizes 12 cylinders for each household in a year. The present system does not differentiate between rich and poor households. So, whether the consumer is an industrialist living in a mansion or a poor person in a tenement, both get 12 subsidized cylinders a year.


The Times of India, 7 November, 2015, http://timesofindia.indiatimes.com/india/Government-looking-at-stripping-the-rich-of-LPG-subsidy/articleshow/49696526.cms


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