India is home to over 1.2 billion people, each of whom needs to eat to survive. Given these numbers, the number of LPG connections in India is among the highest in the world. According to recent estimates, there are over 18 crore LPG connections in the country, which is equivalent to over 7 connections for every 10 homes. LPG connectivity ensures that even remote areas have access to cylinders, with these numbers increasing on a daily basis.
Given these numbers, oil companies have ramped up their services, aiming to provide LPG cylinders to every household. While the number of connections has increased, there are still a large number of households which do not have access to LPG cylinders, relying on traditional “Chulas” for their cooking needs. The government, in a bid to make LPG cylinders accessible to them introduced the PAHAL Scheme.
PAHAL (DBTL) Scheme
LPG in India is provided at subsidized rates, ensuring that people can afford it. The typical subsidy amount ranges between Rs.160 and Rs.170 per cylinder, helping people save a considerable sum each year. Given the numbers involved, there was a provision for misuse of the subsidy amount, which is why the government introduced the PAHAL or Direct Benefit Transfer of LPG Scheme. PAHAL or Pratyaksh Hanstantrit Labh Scheme aims to provide direct benefits to consumers.
The scheme, which was originally introduced in 2013 was relaunched to cover the entire country. As per the scheme, LPG consumers can get the subsidy amount directly into their bank account, eliminating the need for any third party.
Purpose of PAHAL Scheme for LPG Consumers
The primary purpose of PAHAL was to ensure that LPG consumers get the subsidy benefit directly into their account, eliminating any misuse of funds in the process. This ensures that the money we pay in the form of taxes is not misused, providing direct benefits to consumers. The main intention of linking the Aadhar to this scheme was to verify information, making a comprehensive database and promote digitization.
Salient Features and Benefits of PAHAL (DBTL) LPG Scheme
Some of the key features of this scheme are highlighted below:
- Individuals who wish to utilize the benefits under this scheme need to have a bank account. The subsidized amount will be directly transferred to this account.
- The cylinder will be available at the market price, with the subsidy amount paid to the account. This ensures that multiple pricing is avoided and everyone is on par.
- Under the scheme, a one-time advance will be transferred to the bank account of a customer. This amount will be before they buy their first cylinder from the market.
- The subsidy will be paid depending on how many subsidized cylinders an individual is entitled to in a given year.
- Customers can choose to either link their Aadhar number with their gas connection or could directly link their bank account.
- Customers who join the scheme will be paid an advance of Rs.568, which will be transferred into their account.
- Individuals who do not require the subsidy amount can choose to voluntarily give it up. The amount saved will be used for other purposes.
- Customers can register their mobile numbers with their gas agency to get SMS updates related to the scheme.
- The scheme would prevent the sale of unauthorized cylinders, reducing black market deals. This also improves overall safety, for LPG cylinders purchased in the black market could be prone to leaks and other issues.
- It would eliminate cases where individuals have multiple gas connections. Each household can have only one connection, with this move leading to regularization of practices.
- The scheme eliminates intermediaries, helping everyone involved save money. Not only consumers, even oil companies can save money through this, for they need not hire any third party to keep an eye on the subsidy amount.
- It helps agencies keep a track of their consumers, helping them provide improved services.
- Individuals who do not have a bank account cannot utilise the benefits under this scheme. This scheme thereby motivates people into opening bank accounts, pushing the country towards a cashless economy.
Working of PAHAL Yojana/Direct Benefit Transfer Scheme
The working of PAHAL is explained in these simple steps:
- Individuals need to register for the scheme. Registration can be done either by linking their Aadhar with the gas connection id or by directly linking their bank account with the gas connection.
- Once registered, a single advance will be paid to the consumer. This will be at the time they make their first booking.
- Each time they book the cylinder they will have to pay the market price. The subsidized amount will directly be transferred into the bank account which is linked to their gas connection.
- Individuals will be paid the subsidy for the number of subsidized cylinders they are eligible for in a particular year. Post this, they will pay the market rate for cylinders.
Procedure to Register Direct Benefit Transfer (PAHAL) Scheme
Individuals can register using two methods:
- Aadhar – Customers who want to utilize the DBTL scheme through their Aadhar details can do so by linking their Aadhar number with their bank account. This can be done by filling up form 1, which can either be downloaded from the internet or taken from the gas distributor. This form should be deposited at the bank or the LPG distributor. Next, form 2 needs to be filled to link the Aadhar with the LPG connection. This can be done either online, through the official UIDAI website or by submitting it physically to the distributor. Additionally, one can also register via SMS or by using the IVRS facility.
- Without Aadhar – In the event of a consumer not having an Aadhar, he/she can register with their savings account. This can be done by providing the bank details, including the account number, name of account holder, IFSC, contact details, etc. Additionally, one can also ask the bank to link their gas connection with the bank account in order to get the subsidy directly.
Checking Your PAHAL (DBTL) Status
Most gas companies provide an option to check the PAHAL status on their website. Individuals can do this by submitting certain basic information like their consumer number, the state and district they belong to, and their distributor details.
News About LPG Connections in India
Several Countries are Attempting to Replicate India’s LPG Strategy
According to the economic times, there are several countries in the world which are attempting to replicate India’s successful LPG strategy.
Despite being a massive country with over 1.2 billion people, India, with various populist schemes like the Direct Benefit Transfer (DBT) and Pradhan Mantri Ujjwala Yojana (PMUY), has handled the LPG issue relatively easily.
The country’s success in providing millions of people with gas connections has prompted other countries to take notice. These countries are sending envoys to India to study how the system works and to bring the same formula into effect in their own country.
Among the list of countries, there are currently Nepal, Morocco, and Tanzania who have all sent delegates to meet with the petroleum ministry so as to understand the scope of things.
World LPG Association (WLPGA), the world’s prime LPG board has also commended India’s attempts and has endorsed its system to various other players from all continents.
5th April, 2017
Govt Saving Close To Rs.5,000 Crore Through LPG Subsidy
The government is likely to save between Rs.5,000 and Rs.6,000 crore through the Direct Benefit Transfer (DBT) of LPG subsidy scheme. Official data showed that savings through the scheme netted the government Rs.4,824 crore for the period April-December 2016. The market price of non-subsidized LPG cylinders has been on the rise off late, with the price rising by Rs.200 from November 2016 to March 2017.
However, this price will not affect the subsidized LPG cylinders, as the difference in price will be transferred directly to the consumer’s bank accounts through the DBT scheme. The subsidized cylinder sells for approximately Rs.430 per cylinder. The Comptroller and Auditor General of India’s office has been questioning the method of calculation of the savings the government is making through the DBT scheme, and had raised this query with the Oil ministry recently.
Under the PAHAL scheme, the total savings for 2016-17 as calculated by the CAG up to December 2016 stands at Rs.6,661.64 crore.
9th March, 2017