LPG to be Dearer for the Rich

Come New Year, consumers who have taxable income of over Rs 10 lakh will automatically be ineligible for subsidy on domestic cooking gas.

Published: 29th December 2015 04:10 AM  |   Last Updated: 29th December 2015 04:40 AM   |  A+A-


A worker arranges filled Liquefied Petroleum Gas (LPG) cylinders at a distribution centre at Dujana village in Noida, on the outskirts of New Delhi October 7, 2015. | Reuters

NEW DELHI: Come New Year, consumers who have taxable income of over Rs 10 lakh per annum will automatically be ineligible for subsidy on domestic cooking gas (LPG) and need to pay market rate for each domestic cylinder. This would, however, be done initially on a “self-declaration basis” while booking cylinders from January 1, 2016.

At present, all households are entitled to 12 cylinders of 14.2-kg each at the subsidised rate of Rs 419.26, while the market price is Rs 608.

The government had asked well-off people to voluntarily give up subsidised LPG under the “GiveItUp” initiative and buy cooking fuel at market price. However, so far, only over 57.5 lakh consumers, out of nearly 15 crore, have given up the subsidy, the Petroleum Ministry said on Monday. “While many have given up subsidy voluntarily, it is felt that those in the higher income bracket should buy LPG cylinders at market price,” the government said.

lpg.JPGBut will the new measure make a significant dent? According to I-T data, there are only about 16 lakh people who have reported annual earnings of over Rs 10 lakh. Rakesh Nangia, a Delhi-based CA, said, “It is a great step by the government, but it will only act as a catalyst to its earlier appeal.” The government, he said, “Has decided that the benefit of LPG subsidy will not be available if the consumer or his/her spouse got taxable income of over Rs 10 lakh during the previous financial year.”

Those whose annual earnings are over Rs 10 lakh, but who still seek to avail of the benefit, may exploit the ‘loophole’ of getting the connection transferred to any other family member’s name whose income is under Rs 10 lakh.


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