LPG Price Hike: This time the petroleum subsidy has been reduced by 10% as compared to the previous budget. Subsidy was already closed, but now due to reduction in subsidy, LPG cylinders are likely to become expensive. This can affect 20 crore consumers.
LPG Price Hike: In this budget (Budget 2022), Finance Minister Nirmala Sitharaman has cut fuel subsidy. This deduction can reduce the money received in subsidy. In such a situation, the LPG cylinder is likely to be expensive.
Explain that the government allocates funds for subsidy on LPG. This time budget is likely to get less subsidy due to reduction in the amount of funds. In the midst of Corona, the government has stopped subsidies for several months. Except in a few states, LPG cylinders are not being subsidized. Its worst effect is being seen on low-income families and middle-class people.
In this budget, the government has cut fertilizer, food and petroleum subsidies. These three subsidies are very important for the common people. Comparing the three, petroleum subsidy is the least, but its biggest impact will be seen. In the last budget, Rs 6,500 crore was given for petroleum subsidy. But in this budget, it has come down by 10.76% to Rs 5,800 crore.
Who is most affected:
The poorest families in rural areas will be most affected by the subsidy cut. These families have got free LPG connections under the Pradhan Mantri Ujjwala Yojana (PMUY). As long as the benefits of subsidy continued, these families got LPG cylinders filled. But the cylinder refill has reduced due to the discontinuation of subsidy and the inflation of the cylinder has reached the peak. The Pradhan Mantri Ujjwala Yojana is believed to have played the biggest role in the massive victory of the BJP in the 2019 Lok Sabha elections.
Effect of subsidy cut:
According to an estimate, about 20 crore LPG consumers will be affected by the reduction in petroleum subsidy. These people are given LPG subsidy in Direct Benefit Transfer or DBT scheme. These consumers buy cylinders at market prices, but they are given subsidy by the government directly into their bank accounts. To bridge the gap created by the reduction in petroleum subsidy, there is no other way than to increase the price of the cylinder.
In the year 2015, the government started depositing subsidy of Rs 563 in the bank account of the beneficiaries of the cylinder. After 5 years, the data of December 2020 shows that up to Rs 20 subsidy has come in people’s account. Today the price of cylinder is around Rs 900 and customers are not getting any subsidy. Under the DBT scheme, the government gives 12 cylinders to a family in a year. There are about 28 crore LPG consumers in India. Of these, 1.5 crore consumers are out of subsidy as their annual income is more than 10 lakhs.
