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What is PAHAL and how is it going to benefit LPG users?

January 3, 2015

PAHAL-Benefit for LPG users and oil companiesThe world’s largest cash subsidy under the Direct Benefit Transfer Scheme was re-launched by the Union Government in November 2014 in 54 districts and is extended all over the country with effect from January 1, 2015. The scheme was launched for the consumers of Liquid Petroleum Gas (LPG). The modified scheme is referred to as Pratyaksh Hanstantarit Labh or PAHAL DBTL (Direct Benefit Transfer of LPG).

What is PAHAL DBTL?

The PAHAL DBTL ambitious scheme was earlier launched on June 1, 2013 by the previous Government with the objective of giving cash subsidy on cooking gas and it covered 291 districts. The present government has comprehensively examined the PAHAL scheme and after reviewing the problems faced by the consumers, it modified the prior scheme and re-launched it in 54 districts on November 15, 2014 to cover 2.5 crore households. The second phase of this revised scheme started on January 1, 2015 to cover all the districts of the country. Under the previous scheme, it was mandatory to have the Aadhar number for all consumers who want to receive the LPG subsidy. However, this was a big problem for consumers who did not have the Aadhar card, which meant that they could not avail the subsidy.

How to receive LPG subsidy?

However, the new scheme has made available the LPG subsidy to all consumers. Under the modified scheme, the consumers who use LPG can now receive subsidy in his bank account under two options. Such a consumer who joins the scheme will be called Cash Transfer Compliant (CTC) and he can receive subsidy in the bank account.

Option 1

With Aadhar: If the consumers have their Aadhar numbers, then they have to get the number linked to the bank account to receive the subsidy.

Option 2

Without Aadhar: If a consumer does not have his Aadhar number, he can get the subsidy by linking his bank account with the LPG connection ID. This can be done in two ways:

  • The LPG distributor should get all bank details (account holder’s name, account number, and IFSC code) of the consumers who want to get LPG subsidy from his location. All information will be captured in the LPG database.
  • The bank should have all the information of the LPG connection of the consumer. This includes the 17 digit LPG consumer ID.

While the first option is known as the primary option, the second option is referred as the secondary option.  In fact, the primary option of having an Aadhar number is the best option to avail the subsidy and hence recommended to all. Now, those consumers who have already registered themselves under the previous scheme need not register their information again with the LPG distributors. They will receive their subsidy directly in their bank account.

Benefits of PAHAL

There are three bodies which are going to be benefited by the PAHAL scheme:

  • For LPG consumers: All consumers using LPG cylinders will get cash subsidy to buy 12 14.2-kg cylinders or 34 5-kg refills. The amount of money which is equal to the difference between the present subsidised rate and the market price is automatically transferred to the bank account of the consumer, when he or she makes the first booking for a cylinder. However, this is possible only after joining the scheme. When the consumer takes the delivery of the cylinder, another advance subsidy is transferred to the bank account.
  • For Government: This scheme will reduce or prevent the unauthorised sale of LPG cylinders at higher rates. The purchase of multiple gas connections will be prevented. Accordingly, the subsidy burden for the Government will be reduced.
  • For oil marketing companies (OMC): The LPG gas distributors won’t have much burden of sending the cylinders to the intermediate gas suppliers. They will be in direct contact with their consumers, thereby building a good customer relationship. Multiple unauthorized connections won’t be provided. The OMCs will be able to ensure that the consumers receive the LPG gas at one fixed rate and do not have to stand in long queues if they had made the booking well in advance.

Grace period

Those consumers who are not yet in the CTC bracket will be given 3 months time from the date of launch of PAHAL to become CTC. During this period, such consumers will need to buy the LPG cylinders at the market rates but they will receive the subsidised amount in their bank account once they become CTC consumers.

Parking period

After the grace period of three months, all non-CTC LPG consumers will get another three months time as Parking Period. In case a consumer does not become CTC during this period, the parked subsidised funds will lapse and consumer shall become ineligible to receive subsidies till the consumer becomes CTC. When non-CTC consumers become CTC after the parking period, they will get one time permanent advance and total cash subsidized cylinders in that financial year.

Permanent advance

Once a consumer becomes a CTC after joining the PAHAl scheme, a one-time advance will be given to him or her. This is known as the permanent advance and will remain fixed for a financial year. This amount will remain with a CTC consumer till the time he has the gas connection. LPG consumers who have the permanent advance on a previous scale will not be paid for any extra payment on account of the revision in the permanent advance.

Things to remember

  • All consumers need a bank account to join the scheme.
  • One time permanent advance will be received by the consumers in their bank account, before they buy the first market priced LPG cylinder
  • The subsidies will be debited to the consumers’ bank account according to their entitlement of subsidized cylinders.
  • The consumers who have joined the scheme will get cylinders at subsidized price for three  months from November 15, 2014 to February 14, 2015.
  • The consumers will get LPG cylinders at market price for the next three months, but the subsidy amount will be given back to them if they join this scheme before April 14, 2015.

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