Union Government links LPG subsidy to income

Question: Government of India (GOI) announced that the LPG subsidy will not be available to LPG consumers if the consumer or his/her spouse has taxable income of more than-

a) 10 Lakhs
b) 15 Lakhs
c) 20 Lakhs
d) 5 Lakhs

Ans (a)

Related facts:

  • On December 28, 2015, the GoI announced that the benefit of the LPG subsidy will not be available for LPG consumers if the consumer or his/her spouse had taxable income of more than Rupees ten lakh during the previous financial year computed as per the Income Tax Act, 1961.
  • This decision will be given effect to initially on self-declaration basis of LPG consumers while booking cylinders January 2016.
  • This decision will likely affect at least 60 lakh people and It would save the government Rs. 113 crore.
  • The move is intended to stop subsidy for high income consumers who can afford LPG at unsubsidised prices, while the relatively poor consumers would continue to get direct subsidy in their accounts
  • At present, all households are entitled to 12 cylinders of 14.2 kg at the subsidised rate of Rs. 419.26. The market price is Rs. 608 a cylinder.
  • There are 16.35 crore LPG consumers in the country, according to the government, of whom 14.78 crore receive the subsidy directly in their bank accounts.
  • Earlier On March 27, 2015, the government had asked to voluntarily give up using subsidised LPG and instead buy cooking fuel at market price.
  • It is estimated that out of 14.78 crore LPG consumers in the country, over 52 lakh are reported to have given up access to subsidised fuel voluntarily.






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