LPG subsidy through DBT

1.     As decided by the National Committee on DBT and approved by the Cabinet, the Direct Transfer of LPG subsidy to the bank accounts of LPG consumers began on 1st June, 2013 in 18 districts.

2. While the programme was formally launched in Tumkur district of Karnataka, the direct transfer began in 18 districts simultaneously on the midnight of 1.6.2013. The introduction of DBT in 2 districts – Mysore in Karnataka and Mandi in Himachal Pradesh – was postponed because of the Model Code of Conduct in force there. The districts where LPG subsidy through DBT commenced on 1st June 2013 are Anantapur, Chittor, East Godavari, Hyderabad, Rangareddy, Diu, North Goa, Bilaspur, Hamirpur, Una, Tumkur, Pathanamthitta, Waynad, Wardha, Puducherry, Nawan Shehar, Khandwa, Harda. The districts where LPG subsidy through DBT has been introduced have almost 60 lakh LPG consumers

3. The system put in place is that all LPG consumers with Aadhaar Numbers and whose bank accounts are seeded with Aadhaar Numbers would be given an advance amount of Rs.435/- per cylinder booked, immediately on booking a cylinder. This would be credited automatically in their accounts. They would be supplied LPG cylinders at the market price. The net effect on them is nil as their net cash outflow is equal to the subsidized price of an LPG cylinder.

4. Other consumers who do not have Aadhaar seeded bank accounts continue to get LPG cylinders at subsidized rates. They have been given a short period of time for seeding their bank accounts with Aadhaar numbers. The Oil Marketing Companies are making renewed efforts to collect the bank account details of LPG consumers to be given to banks for seeding.

5. In the first three working days of June, over one lakh LPG consumers who have booked cylinders have received the advance. Till the evening of 4th June, 2013, 1.145 lakh DBT transactions amounting to Rs.4.95 crores were transacted. Almost 30 thousand DBT transactions are being executed every day. The failure rates are below 0.5%.

6. It is expected that as bank seeding with Aadhaar Numbers picks up, the number of transactions per day would rise. Even at the current rate almost one million LPG subsidy transactions through DBT could be completed in June, 2013, involving a transfer of over Rs.40 crores.