The decision of the NDA government to keep tax payers with an annual income above Rs 10 lakh per year out of the LPG subsidy regime is a step in the right direction. In the short term there will be some whining, but in the long term everyone will get used to it. According to data collected by the Central Board of Direct taxes about 20.26 lakh people fall in this bracket. They will now have to pay Rs 608 for a cylinder instead of the subsidized rate of Rs 419. It is difficult to say if this move will trim the subsidy bill because around 52 lakh people have already opted out of the subsidy regime. At present there are around 14.78 crore LPG consumers and the subsidy bill for 20015-16 is expected to be in the range of Rs 18,000 crore. The whole idea behind subsidizing gas cylinders is to ensure that the fuel is affordable to the lower rungs of society. As a corollary those who are well-off need to be weaned off the subsidy. What is however remarkable is that over 52 lakh persons responded to a call made by Prime Minister Narendra Modi to opt out if they could afford to buy cylinders at the market rate. This is an achievement even though the target of one crore consumers is still a long way off.
