DBT Blues: Add a zero at the end

The government claimed that DBT in cooking gas saved over Rs 21,000 crore. Now the CAG finds that the actual figure was less than a tenth of it

pratap

Pratap Vikram Singh | September 8, 2016 | New Delhi


#PDS   #Cash Transfer   #Direct Benefit Transfer   #Cash for Food   #DBT   #Aadhaar   #FCI   #CAG  


The Comptroller and Auditor General (CAG) of India has strongly contested the government’s claim of having saved several thousands of crores through the direct benefit transfer for LPG (DBTL). In an audit report titled ‘Implementation of Pratyaksh Hastantrit Labh Yojana (PAHAL Scheme)’, it put the savings at only Rs 1,763.93 crore against the government claim of Rs 21,261 crore, in 2014-15 and 2015-16.
The government launched the scheme in November 2014. To sell the effectiveness of the DBT platform as ‘the’ medium to deliver social security payments and benefits, the government claimed that the savings accrued from the transfer of subsidy paid on the cooking gas directly into consumers’ bank accounts was Rs 14,818 crore for 2014-15 and Rs 6,443 crore for 2015-16.

The cash transfer system was conceptualised by the UPA government, which called it a ‘game-changer’ and key to revive its fortunes in the 2014 national elections. Due to faulty execution, the UPA government abandoned the programme just before elections, fearing backlash from the voters.

In his 2015 Independence Day address, PM Modi claimed that India had saved Rs 15,000 crore annually in subsidy outgo for cooking gas thanks to DBTL and GiveItUp campaign.

The auditor also found several duplications and errors in the databases of the three oil marketing companies. “Audit verified existence of multiple connections bearing ‘same Aadhaar number’ and ‘same bank IFSC and same bank account number’. The verification identified 74,180 LPG customers linked to 37,090 Aadhaar numbers indicating existence of multiple connections. In the case of ‘same bank IFSC and the same bank account number’, 17,694 LPG ‘active’ customer IDs were linked with 8,847 same bank IFSC and same bank account number,” the report said.

The CAG noted that although the DBTL scheme seems to address the issue of diversion of subsidised LPG cylinders for commercial purposes, there is “the risk of diversion of non-subsidised domestic LPG for commercial uses”. There is, indeed, a significant difference in the cost of non-subsidised domestic LPG and commercial LPG on account of differential taxes and duties levied on the two categories of consumers.

Some highlights from the report:

* 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 23,316.21 crore in subsidy payout was on account of the combined effect of decrease in off-take of subsidised cylinders by consumers and lower subsidy rates arising from the sharp fall in crude prices in 2015-16. Audit examination indicated that reduced subsidy rate on account of fall in crude oil price resulted in reduced subsidy payout of Rs 21,552.28 crore, while the effect on the same due to reduced offtake of cylinders by consumers worked out to Rs 1,763.93 crore. Therefore, it is evident that the lower subsidy rates in 2015-16 are, by far, the most significant factor resulted in subsidy savings.

* The ministry of petroleum and natural gas estimated (in February 2016) potential savings in LPG subsidy for 2015-16 at Rs 9,211 crore while the oil marketing companies estimated the savings for the same period at Rs 5,107.48 crore. The methodologies adopted by the ministry and the OMCs were different. In both estimations, however, audit noticed inherent inconsistencies which would lower the estimated savings. MoPNG assumed that the inactive or blocked consumers, who were not eligible for subsidy would have availed the entire quota of 12 cylinders against the national average per capita consumption of 6.27 cylinders in 2014-15. Considering the national average off-take of 6.27 cylinders (as used by OMCs in their estimation), the estimated savings in subsidy for 2015-16 would be Rs 4,813 crore only.

pratap@governancenow.com

Comments

 

Other News

On a personal note: DIVINE

An underground rapper who grew up on Mumbai streets, Divine spins his music around his environment and poverty. His breakout single, ‘Meri Gully Mein’, along with fellow rapper Naezy caught Bollywood’s attention. The Hindi film ‘Gully Boy’ is inspired by their lives and gr

The role model for an IAS officer

Anil Swarup, an IAS officer of Uttar Pradesh cadre who retired in 2018, is a model bureaucrat who retained his optimism right till the end of service and exemplified dedication and commitment. His excitement at the opportunities that a job in the IAS provided is evident on every page of his new book publis

Reform of the civil services: At home and away

The question of reform of the civil services has been debated extensively at all levels at least over the last five to six decades after independence. Indeed, it was soon perceived that the Indian Administrative Service (IAS) may not be well equipped to deal with the problems of an emerging developing coun

The greatest challenge for any government

Shouting vengeance at all and sundry while wriggling out of holes of our own making seems to be our very special national characteristic. Some recent instances are illustrative of this attribute. A number of business tycoons with thousands of crores of unresolved debts have fled abroad with the government

The mysterious case of CBI’s legality

The Central Bureau of Investigation (CBI) came into existence, based on a Resolution of the home ministry, dated April 1, 1963 – a sheer coincidence that it also happens to be April Fool’s day. Over the past few months, we have seen the CBI live up to its founding day with great zeal, being i

The Evolution of Modi

Gujarat was passing through a turbulent phase in the 1980s. The decade began middle class agitations against new reservation policies, and the caste friction turned communal under the watch of chief minister Madhavsinh Solanki, alienating majority of urban population on both counts. The ground was ripe for

Current Issue

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter