Only Rs 1,764 cr subsidy saved by DBT scheme on LPG: CAG

Drilling holes into government claims of huge subsidy savings from direct benefit transfer (DBT), the CAG today said only Rs 1,764 crore in subsidy was saved on LPG on account of the scheme and the bulk of Rs 21,552 crore was due to sharp fall in global prices.

In a report tabled in Parliament, the Comptroller and Auditor General said "the actual subsidy payout during the period from April 2015 to December 2015 was Rs 12,084.24 crore as against Rs 35,400.46 crore during April 2014 to December 2014." The significant reduction of Rs 23,316.12 crore in subsidy payout was "on account of the combined effect of decrease in offtake of subsidised cylinders by consumers and lower subsidy rates arising form the sharp fall in crude prices in 2015-16." Under DBT, subsidy is directly paid into bank accounts of users, thereby eliminating duplicate and fake connections and diversions for non-domestic use.

CAG said the reduced subsidy rate on account of the fall in crude oil price resulted in reduced subsidy payout of Rs 21,552.28 crore.

At the same time, "the effect on the same (subsidy reduction) due to reduced offtake of cylinders by consumers worked out to Rs 1,763.93 crore," CAG said. "Therefore, it is evident that the lower subsidy rates in 2015-16 is, by far, the most significant factor resulted in subsidy savings."