Government to roll out DBT scheme for kerosene from April 1, 2016

The Union Government is going to roll out LPG-like Direct Benefit Transfer (DBT) scheme for kerosene from 1st April 2016.

The scheme in the initial phase will be implemented in selected 26 districts of eight states. These states are Haryana, Chhattisgarh, Jharkhand, Himachal Pradesh, Maharashtra, Madhya Pradesh, Punjab and Rajasthan.

Under the scheme

  • People will buy kerosene at market rate (un-subsidised price) but will get subsidy directly in their bank accounts.
  • The cash subsidy paid to users under it will be equivalent to the difference between current Public Distribution System (PDS) price and market rate of kerosene.
  • During the initial phase, kerosene subsidy will be credited to eligible beneficiaries in advance to avoid any inconvenience of payment of un-subsidised price.

Comment

The move will help Government to curtail or reduce subsidy outgo for kerosene which in 2014-15 was about 24,799 crore rupees. It will also help in plugging the leakages in the kerosene subsidy system.

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