NEW DELHI: The government has managed to bring down the petroleum subsidy by 91% to Rs 3,421 crore in 2021-22, data released by the Comptroller General of Accounts showed. The government had spent Rs 37,878 as a petroleum subsidy in 2020-21. The reason for this sharp reduction of subsidy in petroleum is that the government had stopped depositing the subsidy on LPG or cooking gas since June 2020 in the bank accounts of target beneficiaries.
As the crude price dropped in the international market in 2020 due to pandemic, this gave an opportunity to the government to cut down on subsidies. The decision, many believe, was taken without any official announcement. Ironically, when the price of crude oil shot up in the international market, the government didn’t reinstate the subsidy.
Only recently, the government brought back a subsidy of Rs 200 per gas cylinder (up to 12 cylinders) to over nine crore beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY). The step, the government believes, will have a revenue implication of nearly `6,100 crore a year. The government introduced LPG subsidies with direct benefit transfer (DBTL) or PAHAL scheme on June 1, 2013. India has nearly 28 crores of domestic LPG customers, of which over 8 crores come under the PMUY scheme.
The government said nearly 1.08 crore consumers gave up their subsidy under the ‘GiveItUP’ campaign and stopped subsidies on LPG for people who reported taxable income of Rs 10 lakh and above. The government’s total subsidy bill in FY22 came down by 37% to Rs 4.46 lakh crore compared to Rs 7.1 lakh crore in the previous financial year. The food subsidy bill almost halved to Rs 2.9 lakh crore in 2021-22 from Rs 5.4 lakh crore in the previous year.
Government’s petroleum subsidy
New Delhi: The govt had spent Rs 37,878 as a petroleum subsidy in 2020-21. The reason for this cut of subsidy in petroleum is that the government had stopped depositing LPG subsidies since June 2020 in the bank accounts of target beneficiaries