India to restore LPG, kerosene subsidy to Bhutan by early August

NEW DELHI: India has assured Thimphu that the subsidy on LPG and kerosene it supplies to Bhutan will be restored by the first week of August. New Delhi had earlier this month decided to put an end to the subsidy causing much heartburn in the strategically important country at a time when it was in the middle of its parliamentary polls.


Many said India was trying to influence the outcome of the polls — ruffled as it was with then PM Jigme Thinley's policies — but South Block steadfastly maintained its decision was apolitical. Government sources here said all "administrative, technical and financial arrangements" are in place for resumption of subsidy on cooking gas and kerosene.

While India had taken an "in principle" decision to restore the subsidy, Bhutanese PM Tshering Tobgay was assured by Indian ambassador V P Haran in Thimphu that the subsidy will be restored first week of August.

This was expected as PM Manmohan Singh had himself assured Tobgay — after his triumph in the elections — that he had asked his officials to soon finalize terms for the Plan assistance to Bhutan. India had officially maintained that it needed to again negotiate terms for all financial help to Bhutan after the neighbouring country's 10th Plan expired on June 30.

Indian government sources had also highlighted discrepancies in India's export and Bhutan's import figures suggesting misuse of subsidized commodities. The government though received a lot of flak for its decision forcing officials to admit later that the timing could have been better.

New Delhi was widely believed to be dissatisfied with the overzealous Thinley — Bhutan's first prime minister after the country embraced parliamentary democracy in 2008 — who went out of his way to court the world without bothering to find out how New Delhi would react. Thinley may have been well within his rights — with India in 2007 revising its friendship treaty with Bhutan to allow it to conduct its own foreign policy — but there were few admirers of the hastiness he displayed. This, coupled with the fact that the decision to end subsidy came in the middle of the polls, led to the impression that South Block was trying to take sides. The fact that IOC went ahead and informed Bhutan of the subsidy cut even before the high-level consultations could end also did not help matters.