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India

Union Govt Leaving People To Mercy Of The Market: CPI(M) MP AA Rahim On LPG Subsidy Cut

The CPI(M) MP from Kerala goes on to add that the subsidy on LPG should not be eliminated and that the government should ensure fund allocation for this. 

Image used for Representational Purpose only. (Photo: ANI)

New Delhi: The Government of India on Monday, July 25, admitted in the Rajya Sabha – the upper house of the Parliament, on making a massive reduction to the subsidy on Liquefied Petroleum Gas (LPG).

In a series of data produced by Rameswar Teli, Minister of State in the Ministry of Petroleum and Natural Gas, as a reply to a question posed by CPI(M) MP AA Rahim, it was found that the total subsidy on LPG which was Rs 24,172 crore in the Financial Year 2019-20 was reduced to just Rs 242 crore during the year 2021-22. 

According to the data, the subsidy amount under Direct Benefit Transfer (DBT) was Rs 22,726 crore during the 2019-20 period. It was reduced to Rs 3,658 crore in 2020-21 and during 2021-22 period, it was just Rs 242 crore.

Under the much celebrated Pradhan Mantri Ujjwala Yojana (PMUY) scheme of the Union Government, the subsidy on LPG was Rs 1,446 crore during 2019-20, Rs 76 crore in 2020-21 and during the FY 2021-22, the government data shows that it has not allocated any subsidy under the scheme. 

“By ending the subsidy, the union government is leaving the people to the mercy of the market. The government intends to just remain as a spectator without interfering in any manner. This is extremely condemnable. The government had spent crores just for advertising the PMUY. This scheme was just an exercise in throwing dust in people’s eyes,” says MP Rahim. 

The CPI(M) MP from Kerala goes on to add that the subsidy on LPG should not be eliminated and that the government should ensure fund allocation for this. 

Responding to the question on price rise of petroleum products in the country, Union Minister Rameswar Teli said that it was linked to the price of the respective products in the international market.

“LPG prices are based on Saudi Contract Prices (CP) and Saudi CP has risen from 236 $/MT in April 2020 to 750 $/MT in June 2022, a rise of 218%. However, the Government continues to modulate the effective price to consumers for domestic LPG,” he added.

According to a report by Financial Express, the Union Government is said to have made a provision of Rs 5,800 crore for LPG subsidies for the FY 2023 budget. This includes a DBT of Rs 4,000 crore and Rs 800 crore under the Ujjwala scheme. 

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