Petroleum subsidy spending tops 82% of budgeted target half fiscal half
The Indian government’s expenditure on petroleum subsidy crossed 83 per cent of the allocated spending in the first six months of the current financial year (April 2018-March 2019), data from the oil ministry’s statistical arm shows.
The increase was largely due to a significant rise in expansion of liquefied petroleum gas (LPG) supply to more household under the Pradhan Mantri Ujjwala Yojana (PMUY), coupled with rise in international crude oil and product prices.
Government claims that nine of 10 Indian homes now use LPG for cooking, a two-thirds rise from just five in four-and-a-half years ago. Around 10 crore consumers have been added since April 1, 2015. A generous subsidy for fresh LPG connection to poor families has helped to fuel the rise in demand.
India has a total of 24.9 crore active customers, of which 22.9 crore receive subsidy. Northern states have the highest 99.9 percent LPG coverage ratio, with Punjab 136 percent and Delhi 126 percent leading the table. Chandigarh, Haryana, Himachal Pradesh, Jammu and Kashmir and Uttarakhand have more than 100 percent subscription while Uttar Pradesh has 89.7 percent and Rajasthan95.4 percent.
According to official data published by the Oil Ministry, PMUY beneficiaries in the first six months of the present financial year to September increased to 559.5 lakh, ccompared to 297 lakh in the same period a year ago.
Also, the subsidy outgo on a 14.2 kilograms (kg) LPG cylinder went up to Rs 320.49 per cylinder in the first six months of the fiscal from Rs 162.15 per cylinder at the start of the fiscal year (April 2018), and under-recovery on LPG and kerosene supplies for north-east consumers.
Similarly, Government’s expenditure on Direct Benefit Transfer for LPG increased by 86.6 per cent to Rs 13,921 crore from Rs 7,460 crore recorded in the first six months of the last fiscal year, while claims under Pradhan Mantri Ujjwala Yojana increased by 97.16 per cent to Rs 3,096 crore from Rs 1,608 crore in the same period.
The government had allocated Rs 24,933 crore for petroleum subsidy for the full financial year of 2018-19, which was 1.93 per cent higher than the Revised Estimate of Rs 24,460.48 for 2017-2018. But actual spending in the first six months of 2018-19 went up by 82.1 per cent to Rs 20,672 crore.
Experts predict that if the current rate of spending persisted the government may have to add up another Rs20,000-25,000 crore to its petroleum subsidy bill. The following is the lowdown of the petroleum subsidy spending for the first half of the fiscal year 2018-19.
