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No LPG subsidy for people with annual income Rs 6 lakh: Panel

A Parliamentary Panel suggests ending of subsidised domestic cooking gas for people with annual income of more than Rs 6 lakh.

New Delhi | August 4, 2011 | Updated 09:47 IST

The government should end subsidised domestic cooking gas (LPG) for people with annual income of more than Rs 6 lakh, a Parliamentary Panel has suggested.

A 14.2-kg LPG cylinder in Delhi currently costs Rs 395.35. This is Rs 247 short of its market price. If the panel recommendation is accepted, people with more than Rs 6 lakh per annum household income will have to pay Rs 642.35 per cylinder.

" offset the huge losses made on account of subsidised domestic LPG cylinders, the government may consider to do away with providing subsidised LPG to rich and affluent people, having an income of more than Rs 6 lakh per annum", it said.

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"This should include those holding constitutional posts and public representatives like MPs, MLAs/MLCs," the Standing Committee on Petroleum and Natural Gas said in its latest report.

The suggestion was made in view of the huge subsidy bill the government has to foot while selling fuel at below market price.

"The committee are of the firm opinion that such an initiative by the government will help expand its subsidised LPG distribution to the rural people who are more in the need of this clean fuel," the report, tabled in Parliament on Wednesday, said.

It noted that the government is considering a proposal to limit supply of subsidised domestic LPG cylinders to four per household in a year.

The Committee said a more effective way to cut subsidy outgo will be to completely stop selling subsidised LPG cylinder to the rich. Also, the panel suggested that the oil ministry pursue early clearance of the scheme for providing free LPG connections to all eligible BPL families.

"The scheme (should) be extended for the next Five Year Plan till all eligible BPL families are covered under the scheme", it said.

An Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee was to meet on July 12 to consider restricting supply of subsidised LPG cylinder to four per household in a year. But the meeting was deferred.

According to the proposal, restricted subsidised LPG supply should be only for those who either owned a car, a two-wheeler, a house or figure in the income-tax list.

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