India saved $2 billion by reforming fuel subsidiary delivery

WASHINGTON: India has saved $2 billion in the last one year by taking steps to reform fuel subsidiary delivery, Union Petroleum Minister Dharmendra Pradhan said today, insisting that the government is working to cut the leakages and not the subsidy.

"The Prime Minister asked us to cut the leakages and not the subsidy," Pradhan told a Washington audience at Center for Global Development, a US-based eminent think-tank.

He said that this is what his ministry has successfully worked on in the last one year.

Pradhan was visiting the US en route to attend an energy meeting in Canada.

He said JAM - Jan Dhan programme, Aadhar (key to identity beneficiaries) and mobile for delivery - has reformed fuel subsidiary delivery in India.

He explained that 'Pahal' programme is successfully delivering LPG subsidies to the people in India.

Noting that USD 8 billion was spent on LPG subsidy previous year, Pradhan claimed the steps taken by the government has reduced LPG subsidy to USD 6 billion.

"In just one year we saved USD 2 billion -- savings of 25 per cent," he said, adding that 'Pahal' has helped in eliminating the black market.

This has freed up resources for other poverty alleviation programmes, he said adding the government led by Prime Minister Narendra Modi is dedicated to the poor.

"Developing countries can benefit from India experience in implementing such a programme," Pradhan said.

He said that the benefits of the programme outweigh the cost - recurring savings in LPG will offset one time set up costs.

"JAM and 'Pahal' are the two initiatives of the government as part of Modi's vision of an inclusive growth," he said.

Responding to a question, Pradhan said so far more than seven lakhs people have volunteered to give up their LPG subsidiary benefits.

"I am hopeful that the affluent people of the society would join this movement. Those who can afford should give up. I am hopeful that in the next two quarter, we have a target to achieve and we would do that," he said.

When asked about expanding this to kerosene subsidies as well, Pradhan said this is maintained by the State Governments which varies from state to state.

"We are determined to ensure that all poor man are able to get kerosene subsidy. We are focused to reduce kerosene oil subsidy bottle. This financial year we have the plan to repeat Alwar like (pilot project) experience to 25 other districts," he said.

Pradhan said Andhra Pradesh recently offered that this pilot project be expanded to the entire state.