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Updated on :  

08 min read.

The government launched PAHAL (Pratyaksh Hanstantrit Labh) or Direct Benefits Transfer for LPG (DBTL) scheme for LPG consumers across India on 1 June 2013. Under this scheme, the customers need to have an Aadhaar number for availing of LPG subsidy mandatorily. After reviewing the scheme and examining the difficulties faced by the customers, the government modified this scheme and re-launched it on 15 November 2014. 

The consumers pay for the market price of the domestic cylinder, and the subsidy under this scheme will be directly transferred to their bank accounts. The Ministry of Petroleum and Natural Gas introduced the PAHAL (DBTL) scheme to solve the problems of lack of accountability, resulting in poor consumer service and diversions leading to leakage in LPG subsidy. The main aim of the PAHAL (DBTL) scheme is to curb the diversion of the subsidised LPG.

Since the pricing of domestic subsidised LPG was below the market price, it led to a diversion of subsidised LPG for commercial purposes and illegal diversions, burdening the government with subsidy payment for unauthorised customers. The PAHAL (DBTL) scheme ensures that the subsidy is provided to genuine domestic customers and reaches them directly without diversion. It saves the public money by eliminating diversion.

Under the PAHAL (DBTL) scheme, every LPG customer needs to link his/her Aadhaar number with the LPG database and the bank account database. After linking Aadhaar number, the customers’ subsidy will be transferred to the individuals’ bank accounts as per the delivery of LPG cylinders. If a customer does not have an Aadhaar number, then he/she can link his/her bank account to the LPG database and obtain subsidy in his/her bank account directly. 

The customers who have joined PAHAL (DBTL) scheme by linking the Aadhaar number with the LPG database and the bank account database or by linking the bank account with the LPG database are known as Cash Transfer Compliant (CTC) customers under this scheme.

Objectives of PAHAL (DBTL) Scheme

The objectives of the PAHAL (DBTL) scheme are:

  • Removing incentives for diversion.
  • Protect the entitlement and ensure the payment of subsidy to the consumers.
  • Improving the availability or delivery of LPG cylinders for genuine customers.
  • Eliminating the fake or duplicate connections.
  • Providing self-selection in subsidy.

Benefits of PAHAL (DBTL) Scheme

The PAHAL (DBTL) scheme has many benefits to the customers, the Government of India and the Oil Marketing Companies (OMC). The benefits are as follows:

The benefits of this scheme to the Government of India are:

  • The launch of this scheme will reduce the subsidy burden because of:
    • Elimination of unauthorised usage and supply chain leakages. 
    • Allowing consumers to opt-out of subsidy.
    • Reducing multiple connections via Aadhaar based de-duplication.
  • Improvement in the public service delivery.

The benefits of this scheme to the LPG Consumers are:

  • Direct cash transfer of LPG subsidy to their bank account automatically.
  • Protection of entitlement of customers due to the removal of incentive for diversion. 
  • Improvement in the availability of new LPG connections in the market.
  • Reduction of back-logs of subsidy because of reduced diversion.

The  benefits of this scheme to the Oil Marketing Companies (OMC) are:

  • Reduction in the administrative overheads because of:
    • Less policing.
    • Reduction in grievances related to unauthorised diversion or usage or delayed deliveries.
    • Public audit of subsidy.
  • Allowing focus on consumer relationship management.
  • Removal of multiple fake connections and customers.
  • Better management of imports due to reduction in the product shortage.

Pricing Under PAHAL (DBTL) Scheme

Under the PAHAL (DBTL) scheme, the domestic LPG cylinders are sold to the CTC domestic LPG customers at a Market-Determined Price (that does not include the subsidy). The pricing aspects under this scheme are as follows:

Amount transferred to the customers

The total cash of the LPG cylinder is transferred for each delivered subsidised cylinder (up to the cap) to the CTC consumer as per his/her entitlement.

Grace Period

For the non-CTC customers, a period of 3 months from the date of launch of PAHAL (DBTL) is provided to become CTC customers. During this period, the non-CTC customers will receive their entitlement of subsidised cylinders at the then applicable subsidised retail selling price.

Parking Period

After the grace period of 3 months, the non-CTC customers are provided an additional 3 month parking period, during which they will receive the LPG cylinders at the Market Determined Price. The total cash on the sale of LPG cylinders to the non-CTC customers (as per their entitlement) will be held back by the respective OMC’s.

The respective OMC’s will transfer the total cash (up to the cap) as per their entitlement to the LPG consumers’ bank account when they become CTC customers during the parking period.

Permanent Advance

One-time advance payment is given to every CTC customer who joins this scheme. The advance amount is notified from time to time and will remain fixed for one year. The advance amount ensures that the LPG customers have extra cash for making payment for their first LPG cylinder at the market price.

The advance amount will remain with the customer till the time of termination of the connection. At the time of termination of the connection, the advance amount will be adjusted.

Options to Receive LPG Subsidy Under PAHAL (DBTL) Scheme

The CTC customers will receive subsidy in their bank accounts through the following two options:

  • Option I (Primary): If the Aadhaar number is available, it will be the medium of cash transfer. Thus, an LPG customer must link an Aadhaar Number with the bank account number and the LPG consumer number.
  • Option II (Secondary): If the LPG customer does not have an Aadhaar number, then he/she will directly receive the subsidy in his/her bank account without the need for an Aadhaar number. Under this option, the customer can give his/her bank information (account number/bank account holder name/IFSC code)  to the LPG distributor for capture in the LPG database or can give the LPG consumer information (17 digit LPG consumer ID) to his bank.

Procedure to Apply for PAHAL (DBTL) Scheme

Only the LPG customers and their spouses who do have a taxable income of more than Rs.10 lakhs during the preceding financial year as per the Income Tax Act, 1961 are eligible to receive subsidy under this scheme.

The government notified that LPG customers or their spouses who have an income above Rs.10 lakhs in the previous financial year are not eligible to receive the subsidy from January 2016 onwards.

The eligible LPG customers can apply for this scheme without an Aadhaar number by downloading and filling the appropriate form from the PAHAL (DBTL) website and submitting it to the Bank or LPG distributors.

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