Why You Should Opt Out of LPG Subsidy?

LPG Subsidy, as the name suggests, is the financial aid extended to an individual for promoting economic or social agenda. In short, product / service is offered below the cost price. The difference / Subsidy i.e. Cost price minus Sale Price is borne by the Govt. Which in turn put the strain on Govt finances because Govt is spending more compared to its earning. As the subsidy is financial aid therefore it should be need based rather blanket offering. Financial aid is always provided to those who need it. Sometime back i wrote a post, How to link Aadhaar to LPG Connection Online. It gave me an opportunity to understand the LPG subsidy in a more pragmatic way. LPG Subsidy is the perfect example, how we are exploiting the govt resources.

The basic psychic of average Indian is to get for FREE whatever max he / she can get. It is irrespective of the fact whether we need it or not. No offense to anyone but its a fact of life. I have seen well-off people fighting to waive off Rs 15 parking charges. One incidence which i cannot forget was how an owner of SUV was explaining on a National TV that delinking of petrol price will upset his budget. Another small example is about me only :). I do provide free services to poor and needy people. At the same time, i receive at least 30-40 calls daily from individuals who are buying a flat of more than 1 Cr but they request for free service. It’s a sorry state. We have to come out of this FREE mentality. Lastly, there is a misuse of govt resources. The best example is of misuse of BPL cards. I know one person who was actually poor and beneficiary of BPL (Below Poverty Line) program of Govt. The middlemen convinced him to apply for Govt plots under BPL scheme. The plot was purchased by middlemen by misusing BPL card and this person used to get cut / commission. In short, Govt scheme was misused and actual benefits don’t reach the real beneficiary. This person made huge monies and today also he is BPL. The only difference is that he has another 20 BPL employees working under him. In my opinion, he should voluntarily surrender his BPL card as he is misusing the same.

Opt Out of LPG Subsidy

I sincerely appeal to all my readers to opt out of LPG Subsidy. I am highlighting 5 reasons why we should opt out of LPG Subsidy.

1. Multiplier Effect: Best example, i can think of multiplier effect in recent past is of Anna Hazare Movement. Initially, only handful people started this campaign. The reason for the success of this movement was the multiplier effect. The success of any social campaign solely depends on the multiplier effect. I may think that if i opt out of LPG Subsidy then it will not have any impact. Now assuming that i opt out of LPG Subsidy and then post it on my social media profile and also inform this to all my known people then it will have the multiplier effect. Trust me, to opt out of LPG Subsidy is only a psychological barrier which will have a negligible financial impact at the individual level. I will discuss this in next point. At macro level, this multiplier effect will have a huge impact and help govt in achieving its target. Therefore, the 1st reason to opt out of LPG Subsidy is to create the multiplier effect and start a chain.

2. Negligible Financial Impact: A family of 4 members consume max 6 LPG cylinders in a year. If they opt out of LPG Subsidy, it will not make much difference. Last month i received LPG subsidy of Rs 200 for 1 cylinder, therefore, the yearly subsidy of Rs 1200 or Rs 100 per month. It translates to less than Rs 1 per day for 1 member of the family. Do i need this financial aid?. If i opt out of LPG Subsidy then i will not have any impact on my household budget. As i understand, a person who is earning even Rs 10,000 per month will not mind foregoing Rs 100 per month. Therefore, the conclusion is that if i opt out of LPG Subsidy then it will not impact me financially at an individual level. At a mass level, the impact will be huge. Assuming 1 Mn people opt out of LPG subsidy then at Rs 100 per month, total savings will be 1200 Mn per year.

3. Climatic Impact: In villages, still people use wood or coal to cook the food. These people don’t have access to cooking gas because of overburdened resources i.e. Govt does not have the bandwidth to provide more subsidy. Once people will opt out of LPG Subsidy then govt will start diverting resources to provide cooking gas to these people. Use of wood or coal has a major climatic impact. It is these people, who don’t have access to cooking gas are in actual need of the subsidy. If we opt out of LPG Subsidy then indirectly we will contribute positively towards climatic changes. Though we don’t realize but climatic changes will be one of the key concern in coming years. I have a potential to threaten the existence of mankind.

4. Set an Example for future: If this initiative to opt out of LPG Subsidy is successful then govt may initiate similar initiatives to completely phase out subsidies like Fertilizer Subsidy, NREGA etc. In India, the concept of subsidy is different and misunderstood with social welfare programs. In western countries, everyone get the benefit of a social welfare program but everyone contribute also. In India, entire subsidy bill is borne by the handful taxpayers. A right example will help to ease the burden to the large extent. In my opinion, next initiative should be to tax the rich farmers i.e. they should voluntarily give up tax free status.

5. Improve Economy of the Country: As we all know that subsidy burden is one of the key roadblocks towards the growth of the company. The subsidy also provides cover to the operational inefficiencies of the PSU undertakings. Once subsidy burden is out then it will help to fix the fiscal deficit and improve the overall economy of the state. Global rating agencies consider subsidy as one of the roadblocks towards growth. The reason being, it strains the existing resources. Therefore, if we opt out of LPG Subsidy then we will indirectly help in nation building. Without repairing the economy, we cannot prosper.

How to opt out of LPG Subsidy?

If you wish to opt out of LPG Subsidy then you can click on the following link and be a part of the “Scroll of Honor”.

http://www.mylpg.in/docs/Opt_Out_of_Subsidy_for_mylpg_in.pdf

The readers who opt out of LPG Subsidy after reading this post can comment in following comment section. You can share this post to encourage your friends and family members to opt out of LPG Subsidy.