The Hindu : Business : PDS kerosene diverted to black market: study

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Friday, Aug 04, 2006

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PDS kerosene diverted to black market: study

Special Correspondent

NEW DELHI: More than one-third of subsidised kerosene is being diverted for black marketing or adulteration by the owners of the Public Distribution System (PDS).

Disclosing this, a recent study by the Associated Chambers of Commerce and Industry of India said the Government was losing as much as Rs. 5,700-crore worth of subsidy on account of diversion of kerosene for purposes other than distribution under PDS and called for immediate measure to check this menace.

With its focus on `Need for urgent adjustment of prices and taxes on petroleum products,' the study points out that the government is shelling out around Rs. 15,000 crore to subsidise kerosene at current prices of 2006-07 and around 38.6 per cent of the subsidy meant for the targeted group through PDS is being diverted totally for black marketing and adulteration purposes. While 18.1 per cent of the subsidised kerosene is sold for non-household use, 17 per cent is sold in the black market and 2.6 per cent to non-cardholders, the study reveals.

Releasing the study, the chamber chief Anil K. Aggarwal asked the Centre, particularly finance, petroleum and natural gas, civil supplies and consumer affairs ministries to take joint measures to ensure that targeted subsidy reached the intended group.

Even though LPG consumption has increased 60 times in 35 years and has succeeded in penetrating the rural areas, kerosene usage has increased by nearly 300 per cent well, making the burden on the government heavier as the cost of subsidising LPG at current prices is Rs. 11,000 crore, the study reveals.

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