Govt’s Excessive Savings Claim On LPG Cash Transfers May Be Punctured

Reports from the Comptroller and Auditor General (CAG), once consigned to the dungheap of unread government manuscripts, now have a traction of their own, thanks to Vinod Rai’s efforts to put a big number on the 2G scam: Rs 1,76,000 crore.

The mind-boggling loss figure woke everyone up, and since then the turgid prose of the CAG has not deterred journalists from seeking nuggets of information that will throw the spotlight on governmental failures.

A forthcoming CAG report on the LPG direct benefits transfer (DBT) scheme, implemented by the Modi government from April last year, is unlikely to disclose any scam; but it will surely puncture the excessive claims of subsidy savings by the government. The Hindu has given us a sneak peek into the report here.

The oil ministry said this week that in 2014-15 and 2015-16, it saved Rs 21,261 crore on account of the DBT scheme. The CAG will contradict this by saying that only Rs 2,000 crore was saved due to the DBT scheme and the parallel #GiveItUp exhortation to the better off to give up subsidised cylinders.

The balance of the savings came from the fall in global oil and gas prices.

With the government now actually extending the subsidy scheme to the rural poor, it is anybody’s guess whether even this level of actual savings will be sustained. But no new savings figure will come up early since the government now wants to gradually replace kerosene use with LPG, and so any savings will have to be calculated on the combined LPG plus kerosene subsidies, after kerosene users substantially become gas consumers.

But the message for the Modi government is simple: the DBT scheme, which eliminates at least some of the fake users, is worth having for its own reasons, even if the savings are smaller than expected. There is no need to make excessive claims about it and make it look like a failure when the CAG report comes out.