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DBT Scheme for Kerosene from April 1, 2016

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The government will unveil Direct Benefit Transfer (DBT) scheme for kerosene from 1st April 2016, where the users will buy the cooking fuel at market rate but will get financial support directly in their bank accounts.

  • The scheme will be implemented in selected 26 districts of 8 states.
  • In this regard, states 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.

Eight StatesChhattisgarh, Haryana, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Punjab and Rajasthan

DBT Scheme for Kerosene from April 1, 2016Cash Subsidy
The cash subsidy to be paid to users will be equivalent to the difference between current Public Distribution System (PDS) price of about Rs 12 and market rate of Rs 43 per litre.

  • In order to avoid any inconvenience to the beneficiary through the payment of un-subsidised price, subsidy shall be credited to eligible beneficiaries in advance during the initial purchase.

Kerosene Usage
The subsidy outgo for kerosene for the financial year 2014-15 was about Rs. 24,799 crore. The National Sample Survey 2011-12 indicates that the total consumption of kerosene in the country, including both open market and PDS kerosene was 71.30 lakh kilolitres.

  • Even though consumption of kerosene has been coming down over the years, 85 lakh kilolitres of subsidised PDS kerosene has been allocated to the states in the year 2015-16.