As we all know, market price of household LPG cylinder is Rs.900+ but we have to pay subsidized price Rs.450 only i.e. rest of the amount is borne by govt.

Recently HP is appealing to consumers (who can afford market price) to give up subsidy. The money saved can be used for other development projects of the nation.

One: In fact subsidy is for those who can’t afford; unfortunately, we all are taking benefit. If one decides to opt out subsidy, It will cost max Rs. 5400 (say 450/- extra for 12 cylinders) a year. It isn’t huge amount. And anyway, we have got about 15K tax saving in recent budget (e.g. 7 lac pa income). So I guess, we should take a lead now and respond to HP’s appeal.

Two: Besides household, there are two categories illegally enjoying subsidy which is actually meant for households. Those are hotels and LPG vehicle owners. I doubt, whether giving up subsidy will rise such type of consumption? And as a result, there wont be any significant savings.

What are your views on this?

Uday.