Centre raises cooking gas subsidy ahead of state, national elections

NEW DELHI :The Union cabinet on Wednesday raised cooking gas subsidy from ₹200 to ₹300 per cylinder for about 96 million low-income households, a move coinciding with upcoming assembly elections in five states and next year’s national polls.

Offering additional subsidies aimed at benefiting rural women comes barely a month after the government approved the expansion of the PM Ujjwala Yojana scheme to 7.5 million women to take the number of total beneficiaries to 103.5 million over the next three years.

Beneficiaries of the Ujjwala Yojana, who earlier paid ₹703 for a 14.2-kg bottle against the market price of ₹903, will now have to pay ₹603. The subsidy increase comes weeks after the central government reduced the cooking gas cylinder price by ₹200 for all consumers.

The move to provide additional subsidies on cooking gas and extend Ujjwala Yojana’s reach aims to support women ahead of crucial elections. During the recent special Parliament session, a law was passed to allocate one-third of parliamentary and assembly seats to women.

Anurag Thakur, minister of information and broadcasting, youth affairs and sports, who briefed reporters on cabinet decisions, did not specify the impact of the decision on the government’s finances but said, “When we talk about the welfare of the poor, the government is not concerned with the financial burden on the exchequer but (only) on helping the poor.”

The government has revamped the petroleum subsidy system over the years, with LPG being the only fuel on which subsidy is offered. In 2023-24, the government budgeted only ₹2,257 crore for LPG subsidy, which is sure to go up with the expanded coverage of the Ujjwala scheme and the higher subsidy payments.

Assuming an Ujjwala beneficiary uses four LPG cylinders a year and not taking into account the planned expansion of the scheme, the ₹100 a cylinder subsidy increase announced on Wednesday would push up the LPG subsidy bill by ₹3,840 crore.

By the end of August, the Centre spent ₹1.8 trillion in food, fertilizer and petroleum subsidies, accounting for nearly half of the full-year allocation. The spending in the same period last year was ₹1.4 trillion. The finance ministry last month announced that it will stick to its market borrowing plan of ₹6.5 trillion for the second half. The government can also raise debt from other sources.

Separately, the cabinet also approved the setting up of Sammakka Sarakka Central Tribal University in Telangana’s Mulugu district, allocating ₹889.07 crore for the project. “The new university will not only increase access and improve the quality of higher education in the state but also promote avenues of higher education and advance knowledge by providing instructional and research facilities in tribal art, culture and traditional knowledge system for the benefit of the tribal population in the state,” an official statement said.

The cabinet also approved the terms of reference to the Krishna Water Dispute Tribunal-II under the Inter-State River Water Disputes (ISRWD) Act, 1956. This comes after issues were raised by Telangana in its complaint under the Act. The resolution of the dispute between Telangana and Andhra Pradesh will be on the use, distribution or control of Krishna River waters. Telangana was bifurcated from Andhra Pradesh in June 2014.

The government also approved a proposal for promulgation of Tenancy Regulation, 2023, under Article 240 of the Indian Constitution in the Union territories of Andaman and Nicobar Islands, Dadra and Nagar Haveli, Daman and Diu and Lakshadweep islands. This will provide a legal framework for creating an accountable and transparent ecosystem for renting premises in these Union territories.

The government has also notified the setting up of the National Turmeric Board. It will promote research and development to increase turmeric exports from India to $1 billion annually by 2030 from about $207.45 million in 2022-23.

The Cabinet Committee on Economic Affairs has also revised the budget for the completion of the North Koel Reservoir Project in the drought-prone areas of Palamu and Garhwa districts in Jharkhand, and Aurangabad and Gaya districts in Bihar.

This project will be completed at a revised cost of ₹2,430.76 crore with the central government’s share of ₹1,836.41 crore against the earlier approved amount of ₹1,622.27 crore, which included the central government share of ₹1,378.60 crore.

Gireesh Chandra Prasad contributed to this story.