If the annual taxable income of the registered consumer, exceeds Rs. 10 lakhs, LPG subsidy would not be available, oil ministry announced yesterday.
The new criteria will be applied on the basis of self-declaration at the time of booking a refill in keeping with the “government's approach of trusting citizens”.
Prime Minister Narendra Modi’s ‘Give it Up' campaign, encourages the economically comfortable consumers, to voluntarily surrender the LPG subsidy, with the intention of providing the clean fuel to those, who are still using firewood or cow dung for cooking.
As of now, each registered household is entitled to 12 subsidized gas cylinders per year. The latest development will ensure that consumers, who come in the 30% income-tax bracket lose their subsidy, once the criteria are implemented fully by linking the PAN number to the consumer number.
Though there is no possibility of knowing the number of such consumers immediately, the scheme is expected to free up a substantial chunk of subsidy for the poor. But it will even raise the hackles of a large number of voters in the middle-class families.
It is because of that reason, LPG subsidy which is considered as one of the key factors that can influence the middle class voters and thus the effect falls on Modi’s government.
In 1997, the United Front government has released a comprehensive oil reforms package with timelines for deregulating fuel prices and removing subsidies.
Carrying forward the same decision, in 2002, the ministry under Ram Naik during the NDA-I rule, has decided to first stop and gradually phase out the LPG subsidy by raising rates in small proportions. But after the elections neared and oil prices spiked, the idea was dropped.
During the regime of UPA-II, the ministry under S Jaipal Reddy proposed to deny LPG subsidy benefit to the economically comfortable society.
Mostly, households who possessed a car, house or two-wheelers were supposed to lose the subsidy. But due to the oppositions in Congress and its allies, the proposal did not come into the implementation.
On the other hand, Oil Minister, Dharmendra Pradhan said, “I humbly submit that the time has come for the government, the finance ministry can determine, that people in a particular income bracket should not be given the subsidy... The question as to who should get subsidy should be debated. Subsidy should not be given to people in a particular income bracket.”
Arun Jaitley earlier spoke to the media, saying, “the next important decision India will have to take is whether people like me... (are) entitled to get our LPG subsidy”. I think the sooner we are able to take these decisions as to who is entitled to these subsidies -- of course some people would be -- the better it would be for our system. These decisions are all on our agenda.”
By Phani Ch
