LPG plan: UPA chooses Narendra Modi’s hometown for next phase of subsidy transfer

NEW DELHI: The UPA government has quietly chosen Narendra Modi's home district for the next phase of the scheme to pay cash to people for cooking gas cylinders, a move that is seen as a clever response to BJP that had rubbished the direct benefits transfer plan as a gimmick to buy votes.

State-run Indian Oil Corp, which has the only gas agency in Vadnagar, Modi's hometown, is making special efforts for a successful rollout of the scheme. If it goes as per plan, the scheme will also give stiff competition to Modi's pet project of delivering piped natural gas to households. Piped gas prices have risen sharply in recent months, making it much more costly than cooking gas cylinders, particularly in Gujarat, which depends heavily on costly LNG for piped gas.

"Piped natural gas has already become 30% more expensive than subsidised LPG. This is a challenge for gas distribution companies. Customers who surrendered their LPG connections to connect with piped gas after the Modi government's awareness drives are now changing their minds," said a top executive of one of the city gas distribution companies of Gujarat.

Energy issues, such as scarcity of coal and gas, were fiercely debated in the state's assembly elections last year.

In December, the Election Commission asked the Centre to postpone the implementation of the scheme in view of assembly polls in Gujarat and Himachal Pradesh. BJP feared that cash in the hands of voters may swing the outcome of crucial elections. Now, the stage is set for direct cash transfer to LPG customers in Gujarat's Mehsana, Bhavnagar, Valsad and Anand districts in October. Modi's hometown is in Mehsana district. Under the scheme, 2.3 million people are already receiving Rs 435 in their bank accounts to help them buy cooking gas cylinders. Oil Minister Veerappa Moily says the scheme is a "tremendous success".

An IOC official said Parul Gas Service in Vadangar was among the firm's first few distributors in Gujarat to be covered in software installation for direct cash transfer. It has already started registering Aadhaar cards of its close to 5,000 customers to create a database on the software platform created by IOC's in-house team. "We need to ensure efficient implementation of direct cash transfer in a significant town that is being monitored closely. We have been asked to double check the systems for Vadnagar," said the official.

The state is India's biggest consumer of natural gas, including piped gas, and has connected 10 lakh homes with piped gas. Of these, 7 lakh are customers belong to state-owned Gujarat State Petroleum Corp, which recently acquired BG Group's gas utility that is India's biggest city-gas firm.

A Gujarat government official said the state machinery is closely working with the Unique Identification Authority of India and oil marketing companies to roll out the scheme.