CAG Refutes Government’s Claim Of Saving Rs 22,000 Crore On LPG, Says Savings Are Rs 2,000 Crore

In a report submitted by the Comptroller and Auditor General (CAG) of India which is to be tabled in ongoing Monsoon Session of Parliament, Centre’s claim of saving Rs 22,000 crore from people voluntarily giving up their LPG subsidy is coming out to be false. The CAG has found that the savings have been less than Rs 2,000 crore. The rest of the savings have come from the significant drop in the price of the cooking gas India imports, reported The Hindu.

What is the initiative
The Centre had introduced Direct Benefit Transfers of the LPG subsidy called Pahal and “GiveItUp” campaign, that made them claim of saving almost Rs 22,000 crore in the financial years 2014-15 and 2015-16. (The Financial year 2015-16 began on April 1, 2015 and ended on March 31, 2016) Under GiveItUP campaign, PM Modi had urged well off people to give up their subsidy on LPG.

The CAG also found substantial flaws in the Pahal system. Among them one is diversion of domestic subsidy for commercial use and commercial consumption.

The claim
Addressing a large crowd on August 15 last year, the Prime Minister had said, ““We got the LPG gas subsidy under direct cash benefit transfer. We used the Jan Dhan Yojana and Aadhar cards. Because of this, middlemen and black marketers have been hit. We corrected the system and Rs 15,000 crore, which was stolen every year in the name of gas subsidy, has been saved.”

Mainly the savings have been achieved due to the drop in the global price of LPG that India imports. According to the Petroleum Planning and Analysis Cell (PPAC) of the government, India saw the value of its LPG imports drop from Rs 36,571 crore in 2014-15 to a projected Rs 25,626 crore in 2015-16. That is a saving of Rs 10,945 crore in just a year.