In an appeal to civic duty, the Government of India is asking citizens to forgo a gas subsidy they receive so that gas cylinders can be transferred to the less fortunate. To encourage Indians to "Give It Up," the government called on business leaders to set an example and made the procedure extremely easy.
India recently launched an ambitious cash transfer program to help small businesses and households buy fuel. Under the plan, consumers of liquefied petroleum gas (LPG), commonly referred to as propane or butane, receive a cash subsidy in their bank accounts to buy gas cylinders at market price.
Once joining the scheme, the subsidy, which is equal to the difference between the current subsidized rate and the market price, is transferred to the consumer’s bank account when he/she orders a cylinder. Another transfer is then provided at the time of delivery of the cylinder.
Last November, the Direct Benefit Transfer Scheme for LPG was rolled out across 54 districts, with the rest of the country participating by January 1 of this year.
The scheme was launched by India’s previous UPA government in June 2013, but it was abruptly stopped earlier this year following court orders. It has since been modified to exclude the requirement of providing a unique identification number (Aadhaar) to avail the cash subsidy.
The idea behind the direct benefit transfer is that it can ensure that the subsidy meant for the genuine domestic customer reaches them directly and is not diverted. The Government of India hoped to save millions each year by curbing diversions and leakages in the system but also to ensure efficient delivery of subsidies to the target beneficiaries— the consumers.
This post was originally written for the Collective Solutions 2025 blog, a forward-looking study and collaboration platform to explore how the World Bank and similar multilateral institutions can best support developing countries to meet long-term sustainable development challenges in a post-2025 world. Read more about the study and join the collaboration site here.
I don’t particularly like cities. I’m a country boy. But I have lived in cities for the last 35 years; 10 in Bangkok, 15 in Manila, and 10 in Washington, DC (though DC might be called a town if it were in India or China). In the 1990s, I led work on environmental investments in east and south Asian cities. Most of the cities I worked in were severely “under-infrastructured and under-serviced,” and because many of them are built on coastal zones, this was particularly pronounced when it came to low-lying slums, drainage and sanitation. The heaviest price tag was often for drainage and flood control. During those years, I often wondered if and how the city and country leaders would ever catch up on infrastructure needs with the growing urban populations. Many have done well—while others are in worse shape now because they haven’t been able to meet the human tide.