NEW DELHI: The government will provide cooking gas connections to 7 million rural households, incurring an additional subsidy of Rs 2,700 crore a year to supply villages with the fuel that is predominantly sold in urban areas .
The government will also waive the upfront payment of Rs 1,400 for each customer and minimise paperwork to help villagers switch from firewood and kerosene to liquefied petroleum gas (LPG), two oil ministry official said.
The cabinet had rejected a similar proposal from the oil ministry about three months ago as some ministers were concerned about the subsidy and others demanded a simplified connections.
"The new proposal is made simple so that the poor in villages can get connections without any hassle," an official with direct knowledge of the matter said. The ministry has set a two-year target to connect seven million rural households.
The oil ministry has re-worked the scheme and the same is expected to be placed before the Cabinet for its approval by the end of this month, the official said requesting anonymity.
The oil ministry has argued that fear of subsidy should not deprive rural population from using the clean fuel. Officials said that total LPG subsidy in the current fiscal year is estimated to be Rs 32,000 crore, while the new scheme that would cheer rural people would increase it by only 8.4%.
"Today almost entire urban population is using subsidised LPG (liquefied petroleum gas). Why rural people should not get the same benefit?," a central minister, who did not want to be identified, said. The government must devise ways to exclude rich availing the highly subsidised fuel and it must extend the facility to the poor, the minister said. Fuel subsidy on kerosene, cooking gas and diesel is estimated at Rs 72,800 crore for 2010-11 .
"Local dealers are obliged to give gas connections to villagers by verifying their residence and other details," the official said. State-run oil companies and the ministry will monitor the scheme and any malpractice by dealers would cost them the dealership, the official added.
The government has proposed to provide the new connection along with first cylinder of cooking gas in rural areas at a total cost of just Rs 635 per unit.
The subsidy will be shared between the government and state-run oil companies, which can leverage their funds for corporate social responsibility (CSR). Public sector oil companies, including Indian Oil, Bharat Petroleum and Hindustan Petroleum, mandatorily spend 2% of their net profit on CSR activities. Their combined annual CSR kitty is estimated between Rs 800 and Rs 1,000 crore.
The government proposes to waive off the one-time security deposit of Rs 1,250 for the connection and Rs 150 for the regulator. The beneficiary will pay about Rs 635 per unit for other services, including the cost of a 14.2 kg gas cylinder, which costs approximately Rs 350.
The oil ministry has set a target to provide 10 million (1 crore) new gas connections, mostly in villages, every year till 2015. As per the ministry data, state-run oil companies have so far provided 8.5 million connections this year.
Penetration of clean cooking fuel like piped natural gas (PNG) and liquefied petroleum gas (LPG) will also help the government in proportionately reducing supply of highly subsidised kerosene, which is often misused for adulterating costly fuel such as diesel, an official in the ministry said.
No comments:
Post a Comment