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Subsidised LPG sales under DBT down by 25% ,says Arvind Subramanian

New Delhi,July 2: Sales of subsidised LPG cylinders under the Direct Benefit Transfer scheme (DBT) have come down by about 25 per cent as most "ghost beneficiaries" have been eliminated, CEA Arvind Subramanian today said.

"... essentially, what we find is that on an average, the DBT scheme has reduced subsidised domestic LPG sales by about 25 percent," Subramanian said while speaking at the UNDP conference call here.

On the fiscal impact of DBT, the Chief Economic Advisor said, "We estimate that in 2014-15, savings could be as much Rs 12,700 crore, which is a lot of money. But savings will be lower this year at around Rs 6,500 crore."

Subramanian, however, cautioned that the government should make sure genuine beneficiaries are not excluded.

"It's necessary that we don't overestimate the gain and under-recognise possible cost of doing this and in the case of DBT and Pahal, we have some preliminary evidence to suggest that a lot of it is elimination of ghost beneficiaries, but we can't rule out that there could be exclusion of genuine beneficiaries," he said.

Subramanian, formerly a senior Fellow at Peterson Institute for International Economics, admitted: "We were expecting commercial sales to go up by a huge number, but actually, this did not happen... there was only 6 per cent increase."

Under Pahal, earlier known as DBT, LPG cylinders are sold at market rates and consumers get the subsidy directly in their bank accounts. This is done either through an Aadhaar or a bank account linkage.

Pahal looks to cut down diversion and eliminate duplicate or bogus LPG connections.

The CEA added that because of schemes like Pahal, Jan Dhan and Aadhaar, institutional arrangement has improved and "things are now working".

On the crisis engulfing Greece, Subramanian said, "The (Indian) markets have come back." .

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