Kerosene Subsidy To be Paid Directly to Beneficiaries from April 1

The Finance Ministry said DBT is a reform which will give subsidies to those who actually deserve it.

File photo of people waiting outside a closed ration shop to buy kerosene. (Photo: Reuters)

On Friday night the government said it will roll out the Direct Benefit Transfer (DBT) for kerosene from April 1, where users will buy cooking fuel at market rate but will get financial support directly in their bank accounts.

The areas where this scheme will be implemented in, are:

• Raipur, Durg and Bilaspur in Chhattisgarh
  
• Panipat and Panchkula in Haryana
  
• Shimla, Solan and Una in Himachal Pradesh
  
• Chhatra, Giridih, East Singbhum, Hazaribagh, Jamtara and Khunti in Jharkhand
  
• Hoshangabad, Harda, Khandwa and Burhanpur in Madhya Pradesh
  
• Amaravati and Latur in Maharashtra
  
• Taran Taran, Pathankot and Mohali in Punjab and Pali
  
• Jhunjhunu and Kota in Rajasthan

Direct transfer of kerosene subsidy to the bank accounts of users is a reform and would help in better targeting those who actually deserve it, the Finance Ministry said on Saturday.

Secretary of Economic Affairs Shaktikanta Das also tweeted to congratulate the Ministry of Petroleum and Natural Gas for introducing the DBT scheme.

DBT in kerosene will help curtail subsidy outgo for the cooking fuel, which in 2014-15 was about Rs 24,799 crore.

The cash subsidy that is to be paid to users, will be equivalent to the difference between current Public Distribution System (PDS) price of about Rs 12 and the market rate of Rs 43 per litre.

Currently, the government transfers subsidy to LPG users as well as to beneficiaries of scholarship and pension schemes directly to their bank accounts.

Direct transfer of kerosene subsidy to the bank accounts of users will help in better targeting of the benefits to those who actually deserve it, the Finance Ministry said.