‘Direct cash subsidy transfer won’t be easy to implement’

Petroleum Secretary G.C. Chaturvedi, on Tuesday, said the direct cash subsidy transfer scheme would not be easy to implement due to poor financial inclusion.

Addressing the 11th Petro India Conference organised by India Energy Forum and Observer Research Foundation, Mr. Chaturvedi said the concept of direct cash transfer would result in putting an end to large amount of pilferage taking place in marketing of LPG. 

The scheme, which would be rolled out for 51 districts from January 1, involves the government transferring cash subsidy of Rs. 520.50 into the bank accounts of LPG consumers and asking them to buy their LPG at the market price of Rs. 931 per cylinder.

At present, oil marketing companies are selling LPG at a subsidised rate of Rs. 410.50 per cylinder in Delhi. This led to subsidised LPG being diverted to unintended use such as commercial establishments, who are otherwise supposed to buy gas at market price.

“The cash transfer would not be easy as Aadhar penetration is very low. Only 20 crore people have been enrolled for Aadhaar, out of the total population . Rolling out direct cash transfer in districts where Aadhaar penetration is less than 80-90 per cent would be difficult. We cannot make Aadhaar for cash transfers as the basis in such places,” he remarked.

The direct cash transfer for LPG would be first implemented in 20 districts and the remaining 31 districts would be covered in February or March. “Earlier UIDAI had said they would reach 80 per cent penetration in the 31 districts by April but now they say they would expedite the process, so may be in February the scheme in those districts can be launchd,” he added.

Also officials in the Petroleum Ministry said another problem likely to be faced in implementation of the scheme would be the inadequate coverage of banking services in these districts.

Mr. Chaturvedi also disclosed that India would unveil its new shale gas exploration policy by month-end, in an attempt to exploit the unconventional hydrocarbon resource. “We will come out with a shale gas policy by the end of December. We are sticking to this deadline,’’ he added.