The government, as part of its direct transfer programme, will start transferring Rs 435 directly in the bank accounts of LPG (or cooking gas) consumers in 18 districts, starting June 1.
The scheme was to be rolled out in 20 districts initially but the launch in Mysore in Karnataka and Mandi in Himachal Pradesh has been put off by a month due to assembly and Parliamentary bypolls, official sources said.
Under the scheme, consumers in 18 districts will get the money in their bank accounts every time they book for an LPG refill.
These consumers then will have to buy cooking gas at market price, which is double the Rs 410.50 rate for a 14.2-kg bottle in Delhi.
The government intends to extend the scheme to rest of the country before end of the year but wants to see results in the 20 districts first.
The districts selected have high Aadhaar or unique identification number penetration.
While as many as 89 per cent of the LPG consuming population in these districts have Aadhaar number, the government will give a three-month grace period to them to procure the UID number and seed it with their bank accounts where cash subsidy has to be transferred.
After three months, that is from September 1, only consumers having Aadhaar and banks accounts linked to them will get cash subsidy and the rest will have to buy LPG at market price, they said.
Oil Minister M Veerappa Moily will launch the scheme in Tumkur in his home state Karnataka on June 1 while Minister of State for Petroleum and Natural Gas Lakshmi Panabaka will simultaneously kickoff the scheme in Hyderabad, the capital of her home state Andhra Pradesh.
The government anticipates saving Rs 8,000-10,000 crore in LPG subsidy annually after the scheme is rolled out all over the country.