MY BIZ: No LPG subsidy for taxpayers earning over Rs 10 lakh

No more LPG subsidy for consumers with annual taxable income of over Rs 10 lakh from January – In an effort to curb the supply of subsidized coking gas, the NDA government today announced that taxpayers with an annual income of more than Rs 10 lakh will not get LPG cylinders subsidy from the New Year.

To be applicable from the New Year, the directive would be effected “initially on a self-declaration basis”, a petroleum ministry statement said.

Currently, a subsidised 14.2 kg LPG cylinder is available at ₹ 419.26 in New Delhi while a non-subsidised cylinder will cost ₹ 608.

The Centre has stated that LPG Cylinder Subsidy will not be given to consumers of annual income more than Rs. 10 Lakhs.

“While numerous consumers have actually quit subsidy voluntarily, it is felt that customers in the higher income bracket need to get LPG cylinders at the marketplace cost”, the Petroleum ministry stated while addressing various media organisations.

The government’s Pahal initiative has become the world’s largest direct benefit transfer scheme, claimed by Prime Minister Narendra Modi in his Mann Ki Baat radio address on Sunday.

Although the quantum of subsidy savings is minuscule compared to the overall LPG under-recovery in the recent past (Rs 36,600 crore during FY15 and estimated Rs 15,500 crore for FY16), this could be a step in the right direction and the subsidy could decrease materially once the taxable income slab for availing LPG subsidy is reduced progressively, it said. In April-September, the subsidy outgo was Rs 8,814 crores.

The government had also urged all well-to-do households to voluntarily giving up their LPG subsidy.

The cap was revised in January 2014 to 12 cylinders a year, starting April 1. So far, over 57.5 lakh consumers, out of a total of around 15 crore, have responded to this GiveItUp campaign.

“It may be an opportune time to stop LPG subsidy for the high income consumers as the current subsidy levels on LPG are low (Rs 150-190/cylinder over the last 3 months)”, it said. This enables provision of LPG, a clean fuel, to poor households by replacing the conventional fuels such as kerosene, coal, fuel wood and cow dung.