Claim by Central Government
The Centre claims it would end up saving almost Rs. 22,000 crore in the financial years of 2014-15 and 2015-16 since launching its two-pronged approach on cooking gas subsidy —
1. introducing direct bank transfers (DBT) of the subsidy and
2. asking better off consumers to voluntarily give up theirs.
Arguments by Central Government
Under the DBTL scheme, rolled out in November 2014, cooking gas subsidy is transferred directly to the bank accounts of beneficiaries to cut down on wastages. “If DBTL was not there, the government would have had to spend around Rs 15,000 crore more in 2014-15,” Petroleum Minister Dharmendra Pradhan said at a recent seminar on energy subsidies.
From the ramparts of Red Fort in 2015, Prime Minister Narendra Modi claimed that India has saved Rs 15,000 crore annually in subsidy outgo for cooking gas thanks to DBTL and GiveItUp campaign. “We got the LPG gas subsidy under direct cash benefit transfer. We used the Jan Dhan Yojana and Aadhar cards. Because of this, middlemen and black marketers have been hit. We corrected the system and Rs 15,000 crore, which was stolen every year in the name of gas subsidy, has been saved," Modi said, addressing the nation from the Red Fort.
CAG audit has found that the saving from people voluntarily giving up LPG subsidy and direct bank transfers adds up to less than Rs. 2,000 crore. The remaining saving is actually thanks to the dramatic fall in the prices of LPG that India annually imports.
The audit has also found substantial systemic problems with the Direct Benefit Transfer in LPG scheme which is called Pahal by the government. Among them are diversion of domestic subsidy for commercial use and commercial consumption LPG being diverted to domestic use.