Govt Keen to En­sure Needy Get Cook­ing Fuel Sub­sidy

Min­istry of­fi­cials say a mech­a­nism’s be­ing worked out to iden­tify poor users

The Economic Times - - Companies: Pursuit Of Profit - San­jeev.Choud­hary @times­

New Delhi: A mech­a­nism is in the works to en­sure that the poor are not de­prived of cook­ing gas or kerosene sub­sidy, which is slowly be­ing phased out, oil min­istry of­fi­cials said.

“What is at the heart of our think­ing is that the needy and de­serv­ing must get sub­sidy but na­tional re­sources shouldn’t be wasted upon those who can eas­ily af­ford the fuel,” said an oil min­istry of­fi­cial.

For decades, the pol­icy has been to club sub­sidy with fuel, which made sub­sidy avail­able to ev­ery user. Now, it will be clubbed with just the needy, he said.

State oil com­pa­nies, on di­rec­tions of the gov­ern­ment, have been pe­ri­od­i­cally raising prices of cook­ing gas and kerosene to even­tu­ally align them with mar­ket rates. This will pre­vent di­ver­sion and spare re­sources for other press­ing na­tional con­cerns. Mak­ing sure only poor house­holds re­ceive fuel sub­sidy will re­quire some hard work on con­sumer data, much of which is now avail­able with the gov­ern­ment. “It’s doable. There are some prac­ti­cal ways of iden­ti­fy­ing poor con­sumers and en­sur­ing sub­sidy reaches them alone. But there is no de­ci­sion yet on which mech­a­nism will fi­nally be adopted,” said an­other of­fi­cial.

Im­ple­men­ta­tion of di­rect cash trans­fer for cook­ing gas ben­e­fi­cia­ries has given the gov­ern­ment ac­cess to their Aad­haar, or the unique iden­tity num­ber, as well as bank de­tails. A pool of 2.5 crore poor house­holds, who re­ceived gas con­nec­tion un­der the Ujjwala scheme, is a ready base of con­sumers that would need sub­sidy, said an ex­ec­u­tive at a state oil firm, adding that the chal­lenge would be to use so­cio-eco­nomic data and Aad­haar de­tails to iden­tify the poor among older cook­ing gas cus­tomers.


“We are aim­ing to build a kerosene-free so­ci­ety since the fuel is a health haz­ard and many a time used as adul­ter­ant. But un­til we pro­vide ev­ery­one with al­ter­na­tive en­ergy sources for light­ing and cook­ing, we will con­tinue to pro­vide kerosene,” the of­fi­cial said. Kerosene con­sump­tion has dropped by a third in April-June as ris­ing sup­ply of cook­ing gas and elec­tric­ity helps peo­ple switch. States lifted 1,275 mil­lion litres, nearly 3% less than what the Cen­tre had al­lo­cated in the quar­ter. A key hur­dle in mak­ing a kerosene-free so­ci­ety is the er­ratic sup­ply of power, es­pe­cially in ru­ral ar­eas, where peo­ple are forced to use kerosene for light­ing, said a se­nior oil com­pany ex­ec­u­tive. “Ei­ther state power com­pa­nies should en­sure suf­fi­cient sup­ply in the evening, or the gov­ern­ment should pro­vide sub­sidised solar lanterns to poor fam­i­lies.” Un­der the Ujjwala scheme, the gov­ern­ment aims to en­rol a to­tal of five crore needy con­sumers by March 2019, which also means more sub­sidy bur­den. In the past three years, the oil min­istry has taken some key steps to curb sub­sidy, first, by en­cour­ag­ing af­flu­ent con­sumers to vol­un­tar­ily give up cook­ing gas sub­sidy and then weed­ing out from the ben­e­fi­ciary list con­sumers with more than .₹ 10 lakh in an­nual in­come. More than one crore con­sumers have vol­un­tar­ily given up sub­sidy while around a mil­lion with more than .₹ 10 lakh in­come have been barred.

State oil com­pa­nies, on di­rec­tions of the gov­ern­ment, have been pe­ri­od­i­cally raising prices of cook­ing gas and kerosene


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