Centre saves over Rs 20,000 crore by cutting LPG subsidies: Report
Since May 2020 the price of LPG Cylinder has gone up by over Rs 300.
The price of cooking saw yet another hike this week when it went up by Rs 25 on September 1, taking the price of a 14.2 kg cylinder to Rs 885 in Delhi. Since May 2020, when the country was grappling with soaring cases of Covid-19 and subsequent lockdowns, the price of an LPG cylinder has gone up by over Rs 300. In order to protect the Indian households from these skyrocketing prices of LPG, the Central government offers subsidies on cooking gas that helps in combating the volatility and maintaining a steady price. But things have not gone as per the plan. As per a Business Standard report, close to 29 crore households have not received their consumer subsidy on purchasing LPG since May 2020. It further added that the Centre has not announced the official discontinuation of the subsidy yet, there hasn’t been any deposit of the subsidy either.
Subsidies slashed since Covid-19 outbreak
The publication carried out an analysis that suggests that ever since the pandemic began, the Centre might have saved close to Rs 27,000 by not rolling out the LPG subsidies. For the analysis, the price of a subsidised LPG cylinder was considered as Rs 600, which was last observed in April-May 2020. At the existing price of Rs 885, an average customer would get a subsidy of Rs 285 (885-600) for every purchase or refill. The monthly consumption of LPG cylinders in India stands at 14.5 crore, the BS added. After collating monthly data from rating agency CRISIL and the data shared in the Parliament, the analysis concluded that so far the Centre has saved close to Rs 27,255 crore, with the price of a subsidised cylinder held at constant price of Rs 600.
The Centre had announced in February that the spending on LPG subsidies will be lessened in the current fiscal. While presenting the Union Budget for FY22, Finance Minister Nirmala Sitharaman had announced that LPG subsidy outgo was projected at Rs 14,073 crore, which was substantially lower than the provisional amount of Rs 36,178 crore that was spent in the last fiscal, the report added.