Direct Benefit Transfer in PDS Kerosene (DBTK) Scheme

Direct Benefit Transfer in PDS Kerosene (DBTK) Scheme initiative was launched by Union Petroleum and Natural Gas Ministry on the lines of a similar DBT programme for LPG subsidy which aims at rationalising subsidy based on the approach to cut subsidy leakages but not the subsidy. The overall objective was to bring reforms in Allocation and Distribution of PDS Superior Kerosene Oil (SKO) distribution system.

  • The scheme was initiated the process by a pilot programme in 4 districts of Jharkhand earlier. But later spread to most of the States.
  • Implementation of DBTK results in better subsidy management through direct transfer of subsidy into bank accounts of the beneficiaries. This has reduced subsidy outgo by means of curbing diversion of subsidized Kerosene.
  • On the issue of Direct Benefit Transfer in PDS kerosene, the statements of Fiscal Policy indicate that till date, 12 State Governments/UTs have voluntarily surrendered their PDS kerosene allocations under DBTK Scheme. Eight State Governments/UTs have already cut down their PDS kerosene allocation to Nil. There has been an overall reduction of 12% for the year 2018-19 in comparison to the allocation of 2017-18.
  • As a part of Allocation reforms, States/ UTs have been encouraged to undertake voluntary cut in their PDS SKO allocation by means of providing cash incentive out of the subsidy savings attributable to voluntary cut. Further, States/ UTs are encouraged to become `Kerosene Free’ by bringing all households under LPG.

Challenges

  • The main challenge with the government is the lack of a streamlined and unified digital consumer database. Also, bank branches are not readily available in remote locations which increase the cost of withdrawing money.
  • There is a mismatch between centre and states as centre bears the fiscal impact of subsidy, the States determine the beneficiaries and quantum of subsidy

Ways to Improve

  • There is a need to move towards solar-assisted solutions (and zero kerosene use) for lightening and LPG for cooking. This would be economically beneficial to government as well as households in the long-run.

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