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Case for phasing out LPG subsidy...

The fall in crude oil prices has been an expected boon to the NDA-II government. This has resulted in reducing substantially the foreign exchange outgo on the import of crude and petroleum products, as also in doing away with the huge subsidies on diesel. By the same breath, there is the opportunity to do away with the subsidies  on LPG as well. The expectation of voluntary surrender of subsidy claim has been belied Tamil Nadu that was alert in making the maximum use of LPG connections offers an interesting example. The state has a colossal number of LPG consumers at around 1.54 crore. Statistically, at an average of 4-5 members per family, this points to the coverage of the entire households in Tamil Nadu with its population of around seven crores.

However, under the voluntary surrender scheme in Tamil Nadu less than 50,000 have opted out of subsidy. Today, the subsidy element to domestic consumers has dropped to just around Rs 154 per cylinder which should last, on an average, around 30-45 days. The present scheme also involves considerable expenditure in the provision of cash transfer through bank requiring sizeable administrative work. With crude prices still low, the government should think of abolishing the subsidy at this juncture as the users have been the beneficiaries of using this elegant and cheap  fuel.

Simultaneously the government should endeavour to provide piped gas that would bring about further economies and eliminate the cumbersome distribution through gas cylinders. Delhi and Mumbai could vouchsafe for the elegance and economy of such piped gas.  

Tamil Nadu has not been appreciating the economy and ecologically friendly LNG and LPG. The state has  been missing opportunities on gas by ignoring the construction of a gas grid. Gujarat, the largest user of LNG, provides the most striking example of the advantages of using gas by the industrial and domestic consumers.

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