The proposed direct cash transfer for kerosene and LPG cylinder subsidy may save Rs 15,000 crore for the central government in a year, reports suggest.
Government plans to introduce direct cash transfer to the bank accounts of beneficiaries in order to remove malpractices in the oil industry - diversion of subsidised cylinders for commercial use and adulteration of diesel with cheap kerosene.
The money would be transferred to the bank accounts of cooking gas customers even if they do not have Aadhaar identification. A pilot project in this regard would be implemented in Andaman and Nicobar Islands by April, and will be extended to the rest of the country in a year.
Soon, the petroleum ministry would seek cabinet approval to end the sale of subsidised kerosene and instead introduce cash transfer.
The plan is to sell all LPG cylinders and kerosene at market rates by 2013-14 to discourage diversion, and it is possible even without Aadhaar numbers.
As part of this project, a no-frills bank account would be opened in the name of the beneficiary and states would be made responsible for transfer of subsidy to individual bank accounts.
After taking over the oil ministry on October 29, Moily had said that implementation of direct subsidy on kerosene and LPG would be his top priority.