Posted in Political

Subsidy Culture: LPG Supply & Distribution In India

LPG has been a contentious issue for Indian masses for long. That’s because the supply of the Liquified Propane Gas is highly regulated in the energy-starved nation that imports the bulk of oil and gas for both domestic and industrial consumption. India produces a token minimum local output while imports constitute a huge proportion, driving up our export bills. Suppose India is to cut the energy bill, then we could be 100% totally self-sufficient overnight. The gas bill eats into the GDP and even into individual PCI of every Indian citizen. Yes, we use fossil fuel for our domestic consumption as well as for commercial-industrial purposes.

As LPG was expensive, government not only regulated the supply chain but also subsidized it to domestic consumers irrespective of their socio-economic status right from the days of India’s independence. The regulated distribution of LPG was akin to issue of groceries rationed through state-run PDS (Public Distribution System) outlets to cater to the masses who lived under the poverty line (BPL families).

However, Indian middle-class benefited immensely with a booming economy since the 1990s and therefore there arose a necessity to suspend the subsidies including rations. Successive governments at the center have handled the supply of LPG and Family rations in their own way but the most effective step was recently taken by none other our BJP prime minister Shri Narendra Modi, who went on with execution of bold, extreme and path-breaking measures such as demonetization of high-denomination currencies, unconcerned about the drastic impact these could leave on his vote bank in the subsequent general elections.

This post is an attempt at listing how unsuccessfully the same issues were tackled by the previous Congress government which was corrected in a single stroke by Modi administration with the abolishing of LPG subsidy for those over BPL, and crediting of LPG subsidy directly to the bank accounts of genuine BPL families with grievances. I understand that, if Modi could get re-elected, our PDS could be following similar lines which is a great and welcome move when it comes to curbing corruption. On other hand, this will also serve to plug the wastes and spillages in state-spending. It is a win-win situation for everyone.


Things are getting easier only since the turn of the millennium in India. Telephones and LPG connection for instance were something you had to wait for years once upon a time because these were state owned. I booked my landline after getting married and got it finally in 1997 just before we moved to Malaysia. It was supposedly shortest waiting period. However for LPG connection, my aunt booked mine when I was still in higher secondary school that finally was delivered to me in the year 2000 in my absence (as I lived in Malaysia then). After a lot of deliberation, after my in-laws produced my ID proofs, the department officials reluctantly ordered my connection that was secured by my mother-in-law.

However, miraculously in India things changed from 2001. How we crossed the gulf and how these basic amenities that the rest of the world took for granted became affordable like a magic, is an unbelievable story. Perhaps believable. Indian economy was opened up in the 1990s and privatization of services and industry was afoot like never before. We have to thank our IT guys who made it all possible for us chiefly – as India became a software giant although we had been working in that direction right through the ’70s and ’80s. The ’90s was a consolidation phase and life has never been the same for average middle class Indians since the dawn of the century. There is no looking back ever since. India is on the move. It may have taken longer, but it is better this way.

On retrospect, looking back I think I was lucky to have been asked to wait for my telephone connection! I understand, my wait was because of the nation-building process that was slow but steady.

The LPG story of India is really worth a read. It has been trial and tribulation for the middle-class, some 500 million of us anyway. More number of Indians have been lifted out of poverty in last 20 years. Now central census and statistics peg less than 30% of Indians below the BPL*  – and the parameters of poverty calculation have since been revised. For a 1.2 billion nation that refuses to tread the China road, this is a big, big feat indeed. We feed over a billion who do not starve for a square meal in this 2019. And we are Satellite club, not just the Software hub of the world. All the same we ration our LPG refills!!! Pretty interesting!

In India today, if you live below the poverty line as BPL family, it means you still own a tv, fridge, mobile phone, bicycle and even little gold



These are my exact words penned on July 11, 2011. Today, I have the same to say about the LPG subsidy being withdrawn by the Modi govt to those above BPL limit and the subsidy benefit directly credited to the BPL family bank accounts everytime an LPG refill got booked/delivered. For this, the first major move from Modi government was, introducing the zero balance Pradhan Mantri Jandhan Yojna account which was introduced in our banks soon after Modi govt took over at the center. This is a zero balance savings bank account for the BPL families to get direct credit of subsidies and the scheme covered entire India, bringing up zillions who stayed out, into banking network.

I am saying this because in spite of many loopholes plugged in LPG distribution over years, I as someone who kept shuttling between two countries for years, still found that my LPG was getting booked without my knowledge in my absence. One refill would last me two months in Chennai, but to my dismay I found that almost every month, there was booking done in my name. I changed my agencies multiple times to no avail. I gave up finally. It did not affect me directly but I knew that someone, probably a commercial unit, was reaping subsidy in my name. Cooking fuel is like oxygen to Indian homes.


Here is what I blogged in the matter in 2011 (with some edits):

The new LPG Refill booking method has taken me by surprise.   Its in force for sometime now – but my LPG cylinder lasts me usually for well over 2 months so its a while since i booked mine last time. Moreover, i wait for 10 days to lapse after switching my second cylinder to place my next booking order as I don’t like the idea of stocking 2 full LPGs in my kitchen anytime.  (Many buildings are now opting for pipeline gas systems but so far we have declined the offer – My sister is using pipeline gas system for almost 10 years now in Mumbai.  Says its most convenient. She pays the bill online just like for electricity and water).(she says we are fools not to opt for pipeline gas in this advanced age. My BILs are saying a big ‘no.’ (the brothers share an apartment building)).

I called up last evening at my agency closing time to book for a refill.  I was given a call centre number and was asked to speak to a recorded voice by my agency people.   Now for almost everything i am already speaking to recorded voice only – whether it is for my broadband Airtel or my water purification system Aqua Guard or for dish TV/Tata Sky whatever. There is no more human touch to anything.  I press numbers for options, hear a mechanical voice, register as per choices and I get an SMS/e-mail confirmation – whatever the service could be, whether its fault repair or otherwise.
Last thing where i expected to talk to a machine was while for a re-fill booking of my LPG cylinder.
I booked LPG through a machine for the first time yesterday – but did not register my phone no.  As soon as the machine voice came on, at least i had the presence of mind to get a pen ready to scribble down the registration no. for re-fill. On second thoughts, I needn’t have bothered. My registration number was SMSed to me the very same moment.  I was still annoyed at having been caught off-guard – but now leisurely i reflect, it was bound to happen someday anyway and its high time there is some strict regulation when it comes to LPG demand/supply market conditions.
I was told by the machine, i am allowed only 4 LPG re-fills now every year at the prevailing costs – if i wanted more fuel, from the 5th refill, i will be charged over 800 bucks for a single extra LPG cyclinder.  So that’s it.  Maximum no. of refills allowed per customer is now ONLY 4 PER YEAR – to regulate fuel usage.
I called up my agency to double-check this morning and was told, they have got their refill confirmation order for me via the central supplier (Indane in my case – Indane is the brand name of IOC (Indian Oil Corporation)).
So what is the reason for the new LPG refill booking regulations?  Why should LPG refill bookings/supply be centralized like this after all these years?  If you analyse deep, its because, the middlemen/agencies are over booking from the govt suppliers like Indane (IOC or HP or BP or whatever the company is) and selling the LPG cylinders at astronomical costs for commercial users.  There are even cases where these LPG cylinders are used in CNG cars. Which is thoroughly illegal and also dangerous business. Govt of India supplies LPG at subsidized rates to domestic consumers whereas the commercial users like restaurants are charged at commercial rate, i.e., thrice the domestic rate. So the agencies have got into the side business of supplying the domestic quota to commerical users for a neat profit, and in the process sometimes neglect even supply to desperate domestic users.
The last regulation for LPG connection came when i had to get my ration (PDS) card stamped in my agency mentioning I have 2 cylinders at home. I had to take my LPG regulator to my agency office, where an official checked the number and did the chapa with the regulator number in my ration card. ONLY ONE LPG REGULATOR/CYLINDER CONNECTION IS ALLOWED EVER SINCE, PER RATION CARD. The chapa is to ensure, i don’t get any more LPG connections/cylinders. I had earlier applied for an extra (2nd) cylinder in the same connection. Only one connection is now legal. But double cylinders for the single connection are allowed.
So at that time,whoever had a second LPG connection had to get the second one cancelled as the ration card allowed only one chapa for one connection. And only one member in a family (in the ration card) could possess an LPG connection.  In case 2 members in a family had 2 LPG connections until then, one had to forego a connection and retain only one for the family. LPG consumption is calculated NOT ON INDIVIDUAL BASIS BUT ON FAMILY BASIS.
Thank god, my second cylinder was under the same single LPG connection. The connection is in my name.  And there is none in my husband’s name.  Soon as i returned from Malaysia, i followed up and acquired a new ration card for just 3 of us – me, my hubby and my son. That was in the year 2001. Two of my BILs and their families were still listed in the same old joint family ration card – and as the new regulations allowed only one chapa per card, it gave rise to some family issues.  I also applied for Voters’ IDs, PAN** cards, everything on war-footing basis.  Nothing is organized in India – and such a trivial matter is made very complicated.  Why can’t we streamline basic things like these in our society?  Harassment is waiting for you in every corner when after all what you try to do is, get yourself equipped with bare minimum necessities for survival like the Ration Card, the Voters’ ID.
90% all second LPG connections in a single name also were thus made null and void in a single stroke at that time (must be 7-8 years back).
As a further step, i was given a stamp book. I was asked not to sign in my receipt slip but to stick a govt issued Indane stamp in the receipt to the delivery man whenever my refill came through. This was to ensure, the LPGs meant for domestic purposes were not misused for commercial purposes. However, this was never followed for more than a few months. So I never got to know how many LPG refills got booked in my name over years.
I came to know my connection was misused only when once I tried to book a refill, the recorded voice told me, it was not yet 21 days since my last booking date/delivery  of LPG!!! In the said period, I was not even in India! I never did the booking! I never took the delivery! Hello, so what was going on?!
I got vague replies from my agency as expected. I didn’t have to be told what was going on. I got cold answers.
Illegal business in LPG thus continued despite some regulations in the Congress period. I have personally witnessed the agency boys deliver LPG refill cylinders to small restaurants and bakeries – the ones meant for domestic consumption – at far higher rates. Of course, it is an open secret. Nobody denied and everyone knew.
The final noose I thought was in place around the neck of  the Agency men and the delivery boys WITH NEW LPG REFILL BOOKING REGISTRATIONS MOVED TO IOC CALL CENTRES. I was again mistaken. We needed not have to book our LPG through call center using our registered mobile number necessarily. The agency guys still held our details and they could make a call and book a refill in our name.
An astronomical charge of 800 bucks for your 5th refill booking in an year (in 2011) was utility/consumption based – priced just like electricity/water charges. The more you consume, the higher the surcharges, as it means you are economically in a position to consume more. The 4 cylinder slab pricing is ok – but i think it could be relaxed to 6. Why should we complain when we are so adapted to slab-pricing of electricity already? From your 300th unit of consumption, slabs exist for every 100 units of electricity consumption in our states.
This was supposedly one real good means to control corruption in LPG demand/supply markets.  The actual and optimal consumers stand to benefit maximum with this – then again, the 800 bucks price tag for an LPG still worked out economical to commercial users who continued to benefit from our 5th high-priced refill! There just was no way stopping them! Corruption in India is deep-rooted and our men get innovative all the time!
So what happened in 2014? Modi was the game changer. Subsidy for middle classes got abolished. Your LPG refill/delivery account had to be linked with both Aadhar and Bank account for subsidy if at all you wanted to claim. Plus the LPG for commerical and domestic consumption now came in different colours!!! Genuine BPL families benefited while rest of us gave up our benefits that has proved to be healthy for our exchequer. 
Aadhar*** was the brainchild of the previous Congress government. A good administrator will not depose of the old good. Modi government continued the Aadhar enrollment and in a masterstroke decided to link it with LPG connection, Ration (PDS) card, Bank account, PAN number, everything. Many, many more loopholes have been plugged.
Very recently the Supreme court ruled that the Aadhar seeding need not have to be mandatory. Very cleverly now, the government linked still the PAN number with Bank account and Aadhar that we cannot easily evade the tax net.
Ever since, there is some regulated and disciplined supply and distribution of LPG in my opinion. There is an orderliness about these things as finally there is some clear streamlining. These are after all the basics, but it requires courage and direction to implement such measures. It needs foresight and action. Clarity of thinking and execution. So this is why the nation loves Modi.
Imagine the number of years crores and crores of state subsidies meant for BPL families mis-utilized by those living above the BPL limit and the commercial users. I have been one of them too. Principally because, I could not get excluded from the system even if I might have desired. My condition as well as many of my compatriots who saw the injustice remained the same. Helpless.
Now finally we have Smart cards replacing the Family PDS Ration card. The digitalized one in linked to our Aadhar. I have never used mine – my maid uses it. It is in her possession always. Here too, the benefits to families above the BPL  limit have been stopped forthwith. Must have been done long, long ago.
Just as Modi ordered a rollback of subsidies to those living above the BPL, Rahul Gandhi of Congress government offered Rs.72,000/- per annum (pay without work) to each BPL family (his voters) with a Family PDS Ration card. This man is toxic. A poison weed. His mother Sonia Gandhi was the rotten brain behind the  Rajiv Gandhi Minimum Employment Guarantee Scheme**** of paying farm wages for 100 days an year to agricultural labourers and rural workers whether they worked or not. That has killed farming business like anything in India. Destroyed India maximum already. Rahul Gandhi is a cancer. Italian Mafia used to stealing, robbing communities and nations. Real independence for India will be the day when this Italian mafia quits India for good.  One man Modi is working for uplifting the poor by restoring their dignity, the other one Rahul Gandhi wants to keep them perpetually poor and lazy – like in a drugged state. Shameless fellow who reportedly got caught red-handed in America for possession of drugs (as claimed by Subramanyam Swami). Vajpayee must have left him to rot in US jail for 128 years. How and why is the Election commission keeping mum. Rahul must be prosecuted for his open bribery or cash incentive offer to public for casting vote in his/party’s favour. Is this even legal.
*Source : wiki : India central census
**PAN card: Personal Assessment Number (for Income Tax) in India. PAN number/card is unique and mandatory without which one cannot have bank accounts or insurance in India today. PAN has to be linked to bank account failing which TDS will be deducted @ 20% from your savings or Form 15 G filed (in case you seek exemption from taxes as non-assesee). Even non-assessees have to have PAN for Demat accounts (to deal in stocks), bank accounts, insurances, for purchase/sale of movable/immovable assets, purchase of jewelry over a limit etc. Well, my MIL was forced to get herself Aadhar and PAN cards in her 80th year!
***Aadhar:  Unique Identification card for Indian citizens with biometrics with multipurpose avatars such as ID, Debit card (with bank account linking) etc.
****Rajiv Gandhi Minimum Employment Guarantee Scheme: Congress govt named all their schemes after themselves Jawaharlal Nehru, Indira Gandhi, Rajiv Gandhi. BJP govt names all schemes as ‘Prime Minister Yojna’ – not a single social benefit to the nation is named after Shri Narendra Modi or his predecessor from BJP Atal Bihari Vajpayee.