DBT Scheme For LPG Users Kicks Off To A Resounding Success

DBT Scheme For LPG Users Kicks Off To A Resounding Success Mon, 03 Mar 2014

DBT Scheme For LPG Users Kicks Off To A Resounding Success

  • UPA brings transparency to subsidy funds disbursement
  •  Rs 4.85 crore of subsidy transferred in 4 days
  • Pilot project to expand

Less than a week after the Congress-led UPA Government launched its flagship DBT (Direct Benefits Transfer) scheme for LPG consumers with AADHAAR numbers in 18 districts a week back on 1 June 2013,  this pilot project is off to a resounding success with 1.145 lakh DBT transactions amounting to Rs 4.95 crore transacted as of 4th June evening, and almost thirty thousand transactions being executed every day. The failure rates are below 0.5%.


The DBT scheme aims to transfer the subsidy on LPG cylinders directly to the AADHAAR linked bank accounts of consumers. When the consumer books a cylinder, the subsidy amount of Rs 435 goes directly to his bank account, and he purchases the cylinder at market price.


Thus, for the consumer, the net effect is nil as the market price less the subsidy received is equal to the subsidised price of the LPG cylinder.


Consumers who have not yet registered their bank accounts with AADHAAR will have a short period of time to do so, till which time they continue to buy LPG cylinders at subsidised rates.  Oil Marketing Companies have been asked to focus on collecting their details bank account details for seeding with their AADHAR number. 


As the bank seeding with AADHAAR numbers pick up, the number of transactions per day would rise. At the current rate, there would be almost a million transactions in June, involving a transfer of over Rs 40 crore.



The UPA Government is committed to bringing transparency and accountability to the entire process of fund disbursement in subsidy benefits and social security endowments. DBT will not only bring about transparency for the end user and eliminate loopholes for financial misuse, it will also reduce the subsidy burden.


The present scheme of transferring subsidy money to LPG users directly is estimated to reduce government outlay from Rs 1.61 crore to Rs 97,000 crore, and this is just one scheme.


Gradually along with expansion to more states, DBT will be used for various financial and social inclusion programmes such as pension schemes and wages under the rural employment guarantee scheme.

As of now, the scheme has been launched in 18 districts (2 more are on hold due to local elections) and expected to benefit almost 60 lakh LPG consumers. Formally launched in Tumkur, Karnataka the direct transfer began in 18 districts simultaneously at midnight 1st June. 


The districts are Anantapur, Chittor, East Godavari, Hyderabad, Rangareddy, Diu, North Goa, Bilaspur, Hamirpur, Una, Tumkur, Pathanamthitta, Waynad, Wardha, Puducherry, Nawan Shehar, Khandwa and Harda. The scheme'€™s launch in Mysore, Karnataka and Mandi, Himachal Pradesh is postponed due to the Model Code of Conduct in force there.

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