Foregoing LPG subsidy to help save Rs15,000 cr a year: Modi

The `Give it Up' campaign to persuade well-to-do consumers to forgo subsidy on cooking gas has received overwhelming response with about 2 million consumers volunteering to forgo the subsidy.

Prime minister Narendra Modi on Independence Day gave a big `Thank You' note to those who helped save Rs15,000 crore in subsidy and freeing up cheap fuel connections for the poor.

Addressing the nation on Independence Day, the prime minister said the direct benefit transfer (DBT) scheme to pay cash subsidy to cooking gas consumers directly in their bank account has helped stop blackmarketing and diversions of gas cylinders.

Modi said, by the voluntarily giving up the subsidy, about 2 million subsidised gas connections have been made available, helping to widen the reach of the scarce fuel.

The DBT on LPG (now named PAHAL), which has been recognised as the largest cash transfer programme in the world, has eliminated ''middle-men and blackmarketers'' and ensured that the fuel is delivered to right people, he said.

The scheme has helped link LPG prices to the market across the country while streamlining the subsidy transfer through bank transfers to households.

''We brought DBTL and took advantage of bank accounts opened under Jan Dhan Scheme and Aadhaar numbers to give subsidy straight to consumers,'' Modi said.

Of the 156.5 million active domestic LPG consumers, 138 million are now covered by the DBT scheme, he said.

The scheme was launched in 54 districts on 15 November 2014, and extended all over the country from 1 January 2015 to cut diversion and subsidised fuel being consumed by unintended segments like restaurants and other commercial establishments.

LPG subsidy payout from Union Budget in 2014-15 was Rs40,591 crore against an outgo of Rs52,231 crore in 2013-14, a saving of Rs11,640 crore.

Modi said he had requested those people who can afford to pay market price, to voluntarily give up their subsidy to help extend its reach to the neediest.

''20 lakh people have given up LPG subsidy voluntarily,'' he said, adding that even middle-class families and teachers are among the people who have given up subsidy.

Assuming that each of these consume on an average consume 8 cylinders per annum and at the average subsidy rate of Rs200 per bottle, the saving amounts to about Rs320 crore.

A household is entitled to 12 cylinders of 14.2-kg each every year. The consumer pays market price while the government transfers the subsidy portion into the beneficiary account as and when the consumer buys a LPG refill.