A man walks past gas cylinders loaded on a cart in Mumbai (Representational Picture, Reuters)
A man walks past gas cylinders loaded on a cart in Mumbai (Representational Picture, Reuters)Reuters

The government's projection of saving Rs 12,700 crore under a scheme that transfers subsidy on LPG cylinders to customers' bank accounts is a "large overestimate", according to Canada-based research firm International Institute for Sustainable Development (IISD).

The government just saved Rs 143 crore under the Direct Benefits Transfer for LPG (DBTL) programme during the last financial year ending March 2015, said IISD.

"The government has not so far provided calculations regarding either its claimed savings from DBTL in 2014-15 or projected savings for 2015-16. The much-publicised fiscal savings figure of Rs 12,700 crore, in particular, deserves scrutiny: based on an analysis of publically available data, this figure seems to be a large overestimate," Business Standard quoted Kieran Clarke, Shruti Sharma and Damon Vis-Dunbar of IISD as saying.

The IISD estimate is just 1.12% of the government's claimed figure.

Earlier in July, chief economic advisor (CEA) Arvind Subramanian had said at a conference in New Delhi that savings under the scheme could amount to Rs 12,700 crore.

"We estimate that in 2014-15, savings could be as much Rs 12,700 crore, which is a lot of money," Livemint quoted Subramanian as saying.

While addressing the nation on 15 August, Prime Minister Narendra Modi had said that the country saved Rs 15,000 crore on LPG subsidy through DBTL.

The Modi government had "reintroduced" DBTL programme in 54 districts in mid-November 2014, and expanded the scheme to all districts in the country from January 2015.

"For seven-and-a-half months from April 1, 2014 until November 15, 2014, the scheme had no direct effect on total subsidy expenditure. DBTL only began to formally restrict access to subsidised LPG for non DBTL-registered households in mid-February 2015, and then only in the 54 districts selected in Phase 1 (representing 8% of total districts). In the remaining Phase 2 districts (constituting 92% of total districts), non-registered households retained formal access to directly subsidised LPG until March 31, 2015," IISD has said.

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