No LPG subsidy for consumers with taxable income of more than Rs 10 lakh from January 1

NEW DELHI: Subsidised cooking gas will no longer be provided to consumers earning Rs 10 lakh or more a year, the oil ministry said on Monday, continuing a series of reforms including market-based diesel prices, direct transfer of LPG subsidy and a new approach towards oilfield contracts that eliminates bureaucratic meddling.

The new system will begin in the new year and deny subsidy to such consumers even if the cooking gas connection is in the name of the spouse, the ministry said. In keeping with the approach of trusting the citizens, the rule will initially be implemented on self-declaration basis for cylinders booked from January 2016 onwards, it said.

Currently, there are 16.35 crore cooking gas connections in the country. The government had earlier successfully implemented the PAHAL scheme, which transferred cooking gas subsidy directly to bank accounts of 14.78 crore customers to ensure that benefits go only to the target group.

The government had also given a call to well-to-do households for voluntarily giving up LPG subsidy. This encouraged 57.50 lakh consumers to opt out of LPG subsidy voluntarily.

"The subsidy saved from the 'GiveitUp' campaign is being utilised for providing new connections to the BPL families under the 'Giveback' campaign to help provide the clean fuel to poor households and replace kerosene, coal, fuel wood and cow dung burnt in kitchens,” the ministry said in a statement.

It further said that while many consumers have given up subsidy voluntarily, it is felt that consumers in the higher income bracket should get LPG cylinders at the market price.

"Therefore, the government has decided that the benefit of the LPG subsidy will not be available for LPG consumers if the consumer or his/her spouse had taxable income of more than Rs 10,00,000/- during the previous financial year computed as per the Income Tax Act, 1961," the ministry said.