The government has shown resolve in denying the well-off the subsidy in cooking gas cylinders. But in placing the threshold income at Rs 10 lakh for the subsidy, the move barely scratches the surface as the government still foots over Rs 40,000 crore a year as LPG subsidy. No one who pays income-tax would mind spending the current difference between subsidised and market-price LPG, which is hardly Rs 200. But the current international oil price, at an average of around $37 a barrel, is at an 11-year low, which is why the difference is marginal. The principle behind the subsidy was to dissuade the environmentally unfriendly burning of firewood and charcoal for cooking. The idea of denying the subsidy only to those who earn above Rs 10 lakh annually does very little towards tackling pollution.
As with most entitlement benefits, much more leaks out than what reaches the genuine beneficiary. There is a clear case for doing away with all subsidies and making compensatory direct cash transfers to the real poor of India. But who has the political will to attempt such a sweeping reform? India’s misplaced faith in subsidies hurt massively in diesel which for too long was the preferred fuel and contributed most to urban pollution. Our dirty high-sulphur fossil fuels are now hurting the environment in a rapidly urbanising India. It is a fond hope that the confidence shown in cutting the LPG subsidy for a few will lead to greater will to do away altogether with all subsidies and bring the total subsidy bill down from an estimated Rs 2,67,000 crores.
Download the all new Deccan Chronicle app for Android and iOS to stay up-to-date with latest headlines and news stories in politics, entertainment, sports, technology, business and much more from India and around the world.
