Lok Sabha Question No. 1090 (UNSTARRED), answered on 2016-11-22
Subject: Kerosene Subsidy through DBT
Ministry: CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
Asked by: KALYAN BANERJEE, R. GOPALAKRISHNAN

## GOVERNMENT OF INDIA MINISTRY OF CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION DEPARTMENT OF FOOD AND PUBLIC DISTRIBUTION

LOK SABHA UNSTARRED QUESTION NO. 1090

TO BE ANSWERED ON 22 ND  November, 2016

## KEROSENE SUBSIDY THROUGH DBT

1090.

SHRI KALYAN BANERJEE:

SHRI R. GOPALAKRISHNAN:

Will  the  Minister  of  CONSUMER  AFFAIRS,  FOOD  AND  PUBLIC

DISTRIBUTION miHkksDrk ekeys] [kk| vkSj lkoZtfud forj.k ea=h be pleased to state:

- (a) whether the Government is planning for providing kerosene subsidy through  direct  benefit  transfer  basis,  if  so,  the  details  thereof  and  the reasons therefor;
- (b) the  names  of  districts  wherein  the  DBT  in  kerosene  has  been implemented so far, State-wise and the names of districts which are going to be covered under the DBT in kerosene in the coming years, State-wise;
- (c) whether  the  Government  has  received  complaints  on  large  scale pilferage of subsidised kerosene and if so, the details thereof;
- (d) whether  the  Government  is  losing  more  than  Rs.  500  crores  per annum of subsidy thereof; and
- (e) if so, action proposed to be taken therefor?

## A N S W E R

## MINISTER OF STATE FOR  CONSUMER AFFAIRS, FOOD & PUBLIC DISTRIBUTION (SHRI C. R. CHAUDHARY)

- (a):     Ministry of Petroleum & Natural Gas had sent communication to all States/UTs  proposing  implementation  of  Direct  Benefit  Transfer  in  PDS Kerosene (DBTK). Under the DBTK, PDS Kerosene is sold to the identified beneficiaries at non-subsidized rates and the applicable subsidy is directly transferred into the bank account of the beneficiaries.
- (b):      Jharkhand has become the first State in the country to implement DBTK  from  01.10.2016  in  four  districts  namely;  Chhatra,  Hazaribagh, Jamtara  and  Khunti.  Further,  State  Governments  of  Gujarat,  Madhya Pradesh,  Chhattisgarh,  Maharashtra,  Rajasthan  and  Himachal  Pradesh have indicated their willingness to implement DBTK.

(c) to (e):       Public Distribution System (PDS) kerosene is supplied to the Kerosene  Dealers  from  the  Marketing  Installation  by  Public  Sector  Oil Marketing  Companies  (OMCs).  Distribution  of  PDS  kerosene  within  the State  to  the  ration  card  holders  through  ration  shops/retailers  is  done through the State Government. The State Civil Supplies Authorities make arrangements that the product uplifted is delivered to the fair price shops and to the intended beneficiaries.

In order to check the black marketing of PDS kerosene, the Central Government have made provisions in the Kerosene (Restriction on Use and Fixation of Ceiling Price) Order, 1993, issued under the Essential Commodities Act, 1955, as per which dealers have to sell PDS Kerosene at a price fixed by the Government or OMCs and have to prominently display stock-cum-price board at the place of business including the place of store at a conspicuous place. Further, PDS kerosene released is dyed with blue dye to facilitate detection of PDS kerosene in non-PDS uses. Under this Control  Order,  State  Governments  are  also  empowered  to  take  action against those indulging in black-marketing and other irregularities.

Field Officers of OMCs inspect the Kerosene Dealerships and check for irregularities  like  non-observance of Government/OMCs regulations, black marketing/overcharging,  unauthorized  purchase  and  stock  variation.  In case of any irregularities, action is taken as per the Marketing Discipline Guidelines (MDG).

OMCs  hosted  a  web  portal  which  enables  public  access  to  the movement  of  PDS  Kerosene  tank  trucks.  It  provides  details  of  the  tank truck movement carrying PDS Kerosene from their Dispatch Units/ Depots/ Installations  to  the  various  dealers  along  with  their  names,  invoice number, quantity of product, time of dispatch, tank truck number, etc. on the websites on real time basis.

Direct  Benefit  Transfer  in  PDS  kerosene  (DBTK)  Scheme  has  been initiated  by  the  Government  for  bringing  reforms  in  Kerosene  Subsidy Regime and to ensure that genuine beneficiaries get the benefit of subsidy while  preventing  diversion  and  to  streamline  Public  Distribution  System Superior  Kerosene  Oil    (PDS  SKO)  distribution.  As  per  the  provisions  of DBTK Scheme, the States/UTs would be given cash incentive of 75% of subsidy savings during the first two years, 50% in the third year and 25% in the fourth year. In case the States voluntarily agree to undertake cuts in kerosene allocation, beyond the savings due to DBT, a similar incentive would be given to those States/Union Territories (UTs). The calculation will be based on net savings in kerosene consumption at State level from the baseline. The baseline for calculation of savings shall be 90% of the 201516 allocation.

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